NE ST � 45-801
Neb.Rev.St. � 45-801
NEBRASKA REVISED STATUTES OF 1943
CHAPTER 45. INTEREST, LOANS, AND DEBT
ARTICLE 8. CREDIT SERVICES ORGANIZATIONS
� 45-801. Act, how cited.
Sections 45-801 to 45-815 shall be known and may be cited as the Credit Services Organization Act.
� 45-802. Terms, defined.
For purposes of the Credit Services Organization Act:
(1) Buyer shall mean an individual who is solicited to purchase or who purchases the services of a credit services organization;
(2) Consumer reporting agency shall have the meaning assigned by the Fair Credit Reporting Act, 15 U.S.C. 1681a(f);
(3) Credit services organization shall mean a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides or represents that the person can or will provide any of the following services:
(a) Improving a buyer’s credit record, history, or rating;
(b) Obtaining an extension of credit for a buyer; or
(c) Providing advice or assistance to a buyer with regard to subdivision (a) or (b) of this subdivision;
(4) Extension of credit shall mean the right to defer payment of debt or to incur debt and defer its payment offered or granted primarily for personal, family, or household purposes; and
(5) Person shall include individual, corporation, company, association, partnership, limited liability company, and other business entity.
� 45-803. Exemptions.
(1) The following shall be exempt from the Credit Services Organization Act:
(a) A person authorized to make loans or extensions of credit under the laws of this state or the United States who is subject to regulation and supervision by this state or the United States or a lender approved by the United States Secretary of Housing and Urban Development for participation in a mortgage insurance program under the National Housing Act, 12 U.S.C. 1701 et seq.;
(b) A bank or savings and loan association whose deposit or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or a subsidiary of such a bank or savings and loan association;
(c) A credit union doing business in this state;
(d) A nonprofit organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code;
(e) A person licensed as a real estate broker or salesperson under the Nebraska Real Estate License Act acting within the course and scope of that license;
(f) A person licensed to practice law in this state acting within the course and scope of the person’s practice as an attorney;
(g) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;
(h) A consumer reporting agency;
(i) A person whose primary business is making loans secured by liens on real property;
(j) A person, firm, corporation, or association licensed as a collection agency in this state or a person holding a solicitor’s certificate in this state acting within the course and scope of that license or certificate; and
(k) A person licensed to engage in the business of debt management pursuant to sections 69-1201 to 69-1217.
(2) The burden of proving an exemption under this section shall be on the person claiming the exemption.
� 45-804. Prohibited acts.
A credit services organization, a salesperson, agent, or representative of a credit services organization, or an independent contractor who sells or attempts to sell the services of a credit services organization shall not:
(1) Charge a buyer or receive from a buyer money or other valuable consideration before completing performance of all services, other than those described in subdivision (2) of this section, which the credit services organization has agreed to perform for the buyer unless the credit services organization has obtained a surety bond or established and maintained a surety account as provided in section 45-805;
(2) Charge a buyer or receive from a buyer money or other valuable consideration for obtaining or attempting to obtain an extension of credit that the credit services organization has agreed to obtain for the buyer before the extension of credit is obtained;
(3) Charge a buyer or receive from a buyer money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer if the credit that is or will be extended to the buyer is substantially the same as that available to the general public;
(4) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization, including (a) guaranteeing to erase bad credit or words to that effect unless the representation clearly discloses that this can be done only if the credit history is inaccurate or obsolete and (b) guaranteeing an extension of credit regardless of the person’s previous credit problem or credit history unless the representation clearly discloses the eligibility requirements for obtaining an extension of credit;
(5) Engage, directly or indirectly, in a fraudulent or deceptive act, practice, or course of business in connection with the offer or sale of the services of a credit services organization;
(6) Make or advise a buyer to make a statement with respect to a buyer’s credit worthiness, credit standing, or credit capacity that is false or misleading or that should be known by the exercise of reasonable care to be false or misleading to a consumer reporting agency or to a person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit; or
(7) Advertise or cause to be advertised, in any manner whatsoever, the services of a credit services organization without filing a registration statement with the Secretary of State under section 45-806 unless otherwise provided by the Credit Services Organization Act.
� 45-805. Surety bond or surety account; requirements; action on surety; depository; Secretary of State; powers and duties.
(1) A credit services organization conducting business in this state shall obtain a surety bond or establish a surety account which complies with this section. The bond or account shall be in the amount of one hundred thousand dollars.
(2) If a surety bond is obtained, the bond shall be issued by a surety company authorized to do business in this state and a copy of the bond shall be filed with the Secretary of State. If a surety account is established, the account shall be established and maintained at a federally insured bank or savings and loan association located in this state and notification of the depository, the trustee, and the account number shall be filed with the Secretary of State.
(3) The bond or account shall be in favor of the state for the benefit of any person who is damaged by any violation of the Credit Services Organization Act. The bond or account shall also be in favor of any person damaged by such a violation.
(4) Any person claiming against the bond or account for a violation of the act may maintain an action at law against the credit services organization and against the surety or trustee. The surety or trustee shall be liable only for damages awarded under section 45-810. The aggregate liability of the surety or trustee to all persons damaged by a credit services organization’s violation of the act shall not exceed the amount of the bond or account.
(5) A depository holding money in a surety account under the act shall not convey money in the account to the credit services organization that established the account or a representative of the credit services organization unless the credit services organization or representative presents a statement issued by the Secretary of State indicating that subsection (6) of this section has been satisfied in relation to the account. The Secretary of State may conduct investigations and require submission of information as necessary to enforce this subsection.
(6) The bond or account shall be maintained until two years after the date that the credit services organization ceases operation in this state.
� 45-806. Registration statement; contents; requirements; fee.
(1) A credit services organization shall file a registration statement with the Secretary of State before conducting business in this state. The registration statement shall contain:
(a) The name and address of the credit services organization; and
(b) The name and address of any person who directly or indirectly owns or controls ten percent or more of the outstanding shares of stock in the credit services organization.
(2) The registration statement shall also contain either:
(a) A full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this state relating to the operation of the credit services organization; or
(b) A notarized statement that there has been no litigation or unresolved complaint filed with a governmental authority of this state relating to the operation of the credit services organization.
(3) The credit services organization shall update the registration statement within ninety days after the date on which a change in the information required in the statement occurs.
(4) Each credit services organization registering under this section shall maintain a copy of the registration statement in the files of the credit services organization. The credit services organization shall allow a buyer to inspect the registration statement on request.
(5) The Secretary of State may charge each credit services organization that files a registration statement with the Secretary of State a reasonable fee not to exceed one hundred dollars to cover the cost of filing. The Secretary of State shall not require a credit services organization to provide information other than that provided in the registration statement.
� 45-807. Written statement to buyer; contents; credit services organization; duties.
(1) Before executing a contract or agreement with or receiving money or other valuable consideration from a buyer, a credit services organization shall provide the buyer with a written statement containing:
(a) A complete and detailed description of the services to be performed by the credit services organization for the buyer and the total cost of the services;
(b) A statement explaining the buyer’s right to proceed against the surety bond or surety account required by section 45-805;
(c) The name and address of the surety company that issued the bond or the name and address of the depository and the trustee and the account number of the surety account;
(d) A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer reporting agency as provided by the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.;
(e) A statement that the buyer’s file is available for review at no charge on request made to the consumer reporting agency within thirty days after the date of receipt of notice that credit has been denied and that the buyer’s file is available for a minimal charge at any other time;
(f) A complete and accurate statement of the buyer’s right to dispute directly with the consumer reporting agency the completeness or accuracy of any item contained in a file on the buyer maintained by the consumer reporting agency;
(g) A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency;
(h) A complete and accurate statement of when consumer information becomes obsolete and of when consumer reporting agencies are prevented from issuing reports containing obsolete information; and
(i) A complete and accurate statement of the availability of nonprofit credit counseling services.
(2) The credit services organization shall maintain on file, for a period of two years after the date the statement is provided, an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.
� 45-808. Contract; requirements; cancellation; procedure; notice; breach; effect.
(1) Each contract between the buyer and a credit services organization for the purchase of the services of the credit services organization shall be in writing, dated, and signed by the buyer and shall include:
(a) A statement in type that is boldface, capitalized, underlined, or otherwise set out from surrounding written materials so as to be conspicuous, in immediate proximity to the space reserved for the signature of the buyer, as follows: “You, the buyer, may cancel this contract at any time before midnight of the third day after the date the contract is signed. See the attached notice of cancellation form for an explanation of this right.”;
(b) The terms and conditions of payment, including the total of all payments to be made by the buyer, whether to the credit services organization or to another person;
(c) A full and detailed description of the services to be performed by the credit services organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated length of time, not to exceed one hundred eighty days, for performing the services; and
(d) The address of the credit services organization’s principal place of business and the name and address of its agent in the state authorized to receive service of process.
(2) The credit services organization shall return any payment made by a buyer under the contract if the buyer cancels the contract within three days after it is signed. The payment shall be returned within ten days after the date the organization receives the cancellation notice from the buyer.
(3) The contract shall have attached two easily detachable copies of a notice of cancellation. The notice shall be in boldface in the following form:
Notice of Cancellation
You may cancel this contract, without any penalty or obligation, within three days after the date the contract is signed.
If you cancel, any payment made by you under this contract will be returned within ten days after the date of receipt by the seller of your cancellation notice.
To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice or other written notice to: (name of seller) at (address of seller) (place of business) not later than midnight (date) I hereby cancel this transaction.
(date) .ce(purchaser’s signature)
(4) The credit services organization shall give to the buyer a copy of the completed contract and all other documents the credit services organization requires the buyer to sign at the time they are signed.
(5) The breach by a credit services organization of a contract under the Credit Services Organization Act or of any obligation arising from a contract under the act shall be a violation of the act.
� 45-809. Waiver of rights; void.
A credit services organization shall not attempt to cause a buyer to waive a right under the Credit Services Organization Act. A purported waiver by a buyer of any part of the act shall be void.
� 45-810. Damages.
A buyer injured by a violation of the Credit Services Organization Act may bring an action for recovery of damages. The damages awarded shall not be less than the amount paid by the buyer to the credit services organization plus reasonable attorney’s fees and court costs.
� 45-811. Violation; injunction.
The Attorney General or a buyer may bring an action in district court to enjoin a violation of the Credit Services Organization Act.
� 45-812. Violation; deceptive trade practice.
A violation of the Credit Services Organization Act shall be a deceptive trade practice under the Uniform Deceptive Trade Practices Act.
� 45-813. Statute of limitations.
An action may not be brought under section 45-810 or 45-812 after four years after the date of the execution of the contract for services to which the action relates.
� 45-814. Violation; penalty.
A person who violates the Credit Services Organization Act shall be guilty of a Class II misdemeanor.
� 45-815. Remedies.
The remedies provided by the Credit Services Organization Act shall be in addition to other remedies provided by law.
I identified no significant cases construing this statute.
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MONTANA CODE ANNOTATED
TITLE 30. TRADE AND COMMERCE
CHAPTER 14. UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION
PART 14. MONTANA TELEMARKETING REGISTRATION AND FRAUD PREVENTION ACT
30-14-1401. Short title
This part may be cited as the “Montana Telemarketing Registration and Fraud Prevention Act”.
30-14-1402. Purpose — scope — rulemaking
(1) The purposes of this part are to require telemarketers to register in this state, to establish standards of conduct for telemarketers, and to provide penalties for violations of this part.
(2) This part does not apply to any claim brought by a person under Title 30, chapter 14, part 5, and the provisions of Title 30, chapter 14, part 5, do not apply to any claim brought by a person pursuant to the provisions of this part.
(3) The department shall adopt rules to implement the provisions of this part. The rules must include but are not limited to rules:
(a) establishing forms and procedures for registration, registration renewal, and bonding of sellers or telemarketers;
(b) for administering a telemarketing fraud consumer awareness program; and
(c) ensuring that proper procedures are in place for maintaining civil and criminal actions for violations of this part.
As used in this part, the following definitions apply:
(1) “Consumer” means a person who is or may be required to pay for goods or services offered by a seller or telemarketer through telemarketing.
(2) “Department” means the department of justice created in 2-15-2001.
(3) “Goods or services” means any real property, any tangible or intangible personal property, or services of any kind provided or offered to a person.
(4) “Material aspect” means any factor likely to affect a person’s choice of or conduct regarding goods or services. The term includes currency values and comparative expressions of value, including but not limited to percentages or multiples.
(5) “Person” means a natural person, corporation, trust, partnership, incorporated or unincorporated association, or other legal entity.
(6) “Prize” means anything offered, purportedly offered, given, or purportedly given to a person by chance.
(7) “Prize promotion” means a sweepstakes or other game of chance or an oral or written representation, express or implied, that a person has won, has been selected to receive, or is eligible to receive a prize or purported prize.
(8) “Seller” means a person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the consumer in exchange for consideration.
(9) “Solicitation” means a written or oral notification or advertisement that:
(a) is transmitted by or on behalf of a seller or telemarketer by any printed, audio, video, cinematic, telephonic, or electronic means to a consumer; and
(b) in the case of a notification or advertisement other than by telephone, either of the following conditions is met:
(i) the notification or advertisement is followed by a telephone call from a seller or telemarketer; or
(ii) the notification or advertisement induces a response by telephone and, through that response, a seller or telemarketer attempts to make a sale of goods or services.
(10) “Supervised financial organization” means any bank, trust company, savings and loan association, mutual savings bank, credit union, industrial loan company, consumer finance lender, commercial finance lender, or insurer, provided that the organization is subject to supervision by an agency of this or any other state of the United States or an agency, bureau, or department of government of the United States.
(11) “Telemarketer” means a person, located within or outside of this state, who in connection with telemarketing initiates or receives telephone calls to or from a consumer in this state. The term includes a seller directly engaged in telemarketing on the seller’s own behalf or a person engaged in telemarketing at the direction of a seller.
(12) “Telemarketing” means a plan, program, or campaign that is conducted by telephone to induce the purchase of goods or services and that involves more than one telephone call to a consumer.
30-14-1404. Registration of sellers or telemarketers
(1) (a) Unless exempt under 30-14-1405, a person may not act as a seller or telemarketer without first having registered with the department.
(b) The initial application for registration must be approved by the department prior to a seller or telemarketer offering or offering for sale consumer goods or services through any medium.
(c) A registered seller or telemarketer shall submit an application for renewal of registration annually to the department.
(d) The application for a certificate of registration or renewal must include but is not limited to the following information:
(i) the true name, current address, telephone number, and location of the seller or telemarketer, including each name under which the seller or telemarketer intends to engage in telemarketing;
(ii) each occupation or business that the seller’s or telemarketer’s principal owner has engaged in for the 2 years immediately preceding the date of the application;
(iii) whether any principal or manager has been convicted or pleaded guilty to or is being prosecuted by indictment for racketeering, violations of state or federal securities laws, or a theft offense;
(iv) whether there has been entered against any principal or manager an injunction, a temporary restraining order, or a final judgment in any civil or administrative action involving fraud, theft, racketeering, embezzlement, fraudulent conversion, misappropriation of property, or violation of any federal or state consumer protection law. The information must include any pending litigation against the applicant.
(v) whether the seller, at any time during the previous 7 years, has filed for bankruptcy, been adjudged bankrupt, or been reorganized because of insolvency;
(vi) the true name, current home address, date of birth, social security number, and all other names of the following:
(A) each telemarketer or other person to be employed by the seller;
(B) each person participating in or responsible for the management of the seller’s business; and
(C) each person, office manager, or supervisor principally responsible for the management of the seller’s business;
(vii) the name, address, and account number of every institution where banking or any other monetary transactions are conducted by the seller; and
(viii) a copy of all scripts, outlines, or presentation material that the seller will require a telemarketer to use when soliciting, as well as all sales information to be provided by the seller to a purchaser in connection with any solicitation.
(2) (a) The application for registration or renewal must be accompanied by a surety bond in the amount of $50,000. The bond must provide for indemnification to the state of Montana for any person suffering a loss as the result of violation of this part.
(b) The surety may for any cause cancel the bond upon giving a 60-day written notice by certified mail to the applicant and to the department. Unless the bond is replaced by that of another surety before the expiration of the 60-day notice of cancellation, the registration of the seller or telemarketer must be treated as lapsed.
(c) The surety bond must remain in effect for 1 year from the period the telemarketing business ceases to operate in this state.
(d) (i) Any business required under this part to file a bond with a registration application may file, in lieu of the bond, a certificate of deposit, cash, or a government bond in the amount of $50,000.
(ii) The department shall hold the cash, certificate of deposit, or government bond for 1 year from the period the telemarketing business ceases to operate in this state or registration lapses in order to pay claims made against the telemarketing business for its activities during its period of operation in this state.
(iii) For the purposes of this section, “government bond” means any United States bond, treasury note, or other public debt obligation of the United States that is unconditionally guaranteed as to both interest and principal by the United States .
(e) The registration of a telemarketing business must be treated as lapsed if at any time the amount of the bond, cash, certificate of deposit, or government bond falls below the amount required by this section.
(f) The aggregate liability of the surety company to the state of Montana for all persons injured by a seller’s or telemarketer’s violations may not exceed the amount of the bond.
(3) The following constitute a violation of this part:
(a) failure to register, maintain, or renew a registration if required;
(b) failure to meet the surety bond requirement if required to provide a bond;
(c) including any false or misleading information on a registration application; and
(d) misrepresenting that a seller or telemarketer is registered.
(4) A violation of subsection (3) of this section also constitutes a violation of 30-14-103 and is subject to the penalty provisions of 30-14-1414 and the Montana Unfair Trade Practices and Consumer Protection Act of 1973.
30-14-1405. Exemptions from registration and bonding
The registration and bonding requirements of 30-14-1404 do not apply to:
(1) any securities, commodities, or investment brokers, dealers, or investment advisers or any associates of securities, commodities, or investment brokers, dealers, or investment advisers who are subject to licensure or registration by the securities and exchange commission, the national association of securities dealers, or another self-regulatory organization, as defined by 15 U.S.C. 78(c), or by an agency of this state or any other state and who are soliciting within the scope of their license or registration;
(2) a person engaged in solicitation for a religious, charitable, political, educational, or other noncommercial purpose or a person soliciting for a domestic or foreign nonprofit corporation that is registered with the Montana secretary of state;
(3) a business-to-business sale;
(4) a person that solicits sales by periodically publishing and delivering a catalog of the person’s merchandise to prospective purchasers, if the catalog:
(a) contains a written description or illustration of each item offered for sale;
(b) includes the business or home address of the person soliciting the sale;
(c) includes at least 20 pages of written material and illustrations;
(d) is distributed in more than one state; and
(e) has a circulation by mailing of not less than 150,000;
(5) a person who solicits contracts for maintenance or repair of goods previously purchased from that person or from the person on whose behalf the solicitation is made;
(6) a person soliciting a transaction regulated by the commodity futures trading commission if the person is registered or temporarily licensed with the commodity futures trading commission under the Commodity Exchange Act, Title 7, chapter 1, of the United States Code, and the person’s registration or license is not expired, suspended, or revoked;
(7) a supervised financial organization or parent, subsidiary, or affiliate of a supervised financial organization;
(8) an insurer authorized to transact insurance under Title 33, chapter 2, part 1, a person licensed as an insurance producer under Title 33, chapter 17, part 2, or staff members, licensed or unlicensed, of the producer;
(9) a person soliciting the sale of services provided by a satellite or cable television system or a radio or television station authorized by the federal government or this state to provide services in this state;
(10) a telephone company or its subsidiary or agent or other business regulated by the Montana public service commission, the federal communications commission, a rural telephone cooperative or its subsidiary or agent, or a federally licensed cellular telephone or radio telecommunication service provider;
(11) a person soliciting business from consumers that have an existing business relationship with or have previously purchased from the business enterprise for which the person is soliciting;
(12) a person operating a retail business establishment under the same name as that used in the solicitation and:
(a) the products or services are displayed and offered for sale at the business establishment; and
(b) a majority of the person’s business involves the consumer obtaining the products or services at the business establishment;
(13) a person soliciting for the sale of a magazine or newspaper of general circulation;
(14) an issuer or a subsidiary of an issuer that is authorized to offer securities for sale in this state;
(15) a book, video, record, or multimedia club, contractual plan, or arrangement:
(a) under which the seller provides the consumer with a form that the consumer may use to instruct the seller not to ship the offered merchandise;
(b) that is regulated by the federal trade commission regulation, 16 CFR 425, concerning the use of negative option plans by sellers in commerce; or
(c) that provides for the sale of books, videos, records, multimedia products, or other goods that are not covered by subsection (15)(a) or (15)(b), including continuity plans, subscription arrangements, standing order arrangements, single sales, supplements, or series arrangements under which the seller periodically ships merchandise to a consumer who has consented in advance to receive the merchandise on a periodic basis;
(16) a real estate salesperson or broker licensed by this state;
(17) a person that has provided telemarketing sales services under the same name and derives 50% of gross telemarketing sales revenue from contracts with persons exempted under this section from registration requirements;
(18) a person soliciting the sale of food or food products if the solicitation is not intended to and does not result in a sale in excess of $100 to a single address.
30-14-1406. Telemarketing fraud consumer awareness program
The department shall establish and administer a telemarketing fraud consumer awareness program. The program must be funded as provided in 30-14-1407(2).
30-14-1407. Authority of department and county attorney
(1) The department and a county attorney have the same authority to enforce and carry out the provisions of this part as they have under Title 30, chapter 14, part 1.
(2) All civil fines, costs, and fees received or recovered by the department pursuant to this section must be deposited into a state special revenue account to the credit of the department and must be used to defray the expenses of the department in discharging its administrative and regulatory powers and duties in relation to this section and to fund the telemarketing fraud consumer awareness program established in 30-14-1406. Any excess civil fines, costs, or fees must be deposited in the general fund.
(3) All civil fines, costs, and fees received or recovered by a county attorney must be paid to the general fund of the county in which the action was commenced.
30-14-1408. Recordkeeping requirements
(1) (a) A telemarketer shall keep records subject to this section for a period of 24 months from the date the record is produced.
(b) The records that must be kept for the 24-month period include:
(i) all substantially different advertising, brochures, telemarketing scripts, and promotional materials;
(ii) the name and last-known address of each prize recipient and the prize awarded;
(iii) the name and last-known address of each consumer, the goods or services purchased, the date the goods or services were shipped or provided, the amount of goods or services provided, and the amount paid by the consumer for the goods or services;