Credit Repair Organizations Act
Title 44. Trade and Commerce Chapter 11.
Regulations Concerning Particular Businesses Article 7. Credit Services § 44-1701. Definitions

In this article, unless the context otherwise requires:

1. “Buyer” means any natural person who is solicited to purchase or who purchases the services of a credit services organization.

2. “Credit services organization” means a person who, with respect to the extension of credit by others, sells, provides, performs or represents that he can or will sell, provide or perform any of the following services in return for the payment of monies or other valuable consideration:

(a) Improving a buyer’s credit record, history or rating.

(b) Obtaining an extension of credit for a buyer.

(c) Providing advice or assistance to a buyer with regard to either subdivision (a) or (b) of this paragraph.

3. “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment, which is offered or granted primarily for personal, family or household purposes.
§ 44-1702. Exemptions

This article does not apply to:

1. A person who is organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States and who is subject to regulation and supervision by an official or agency of this state or the United States.

2. A bank or savings and loan institution whose deposits or accounts are eligible for insurance by the federal deposit insurance corporation or the federal savings and loan insurance corporation.

3. A person licensed as a real estate broker by this state if the person is acting within the course and scope of that license.

4. A person licensed to practice law in this state if the person renders services within the course and scope of his practice as an attorney at law.

5. A broker-dealer registered with the securities and exchange commission or the commodity futures trading commission if the broker-dealer is acting within the course and scope of such regulation.

6. Any nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code.

§ 44-1702.01. Repealed by Laws 1977, Ch. 126, § 1

§ 44-1703. Credit services organizations; prohibited activities

A credit services organization and its salespersons, agents and representatives who sell or attempt to sell the services of a credit services organization shall not do any of the following:

1. Charge or receive monies or other valuable consideration before full and complete performance of the services the credit services organization has agreed to perform for or on behalf of the buyer, unless the credit services organization, in conformity with § 44-1708, has obtained a surety bond issued by a surety company authorized to do business in this state. If a credit services organization is in compliance with this paragraph, the salesperson, agents and representatives who sell the services of the organization are not required to obtain the surety bond provided for in § 44-1708.

2. Charge or receive monies 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 which is or will be extended to the buyer is on substantially the same terms as those available to the general public.

3. Make or counsel or advise a buyer to make any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer’s creditworthiness, credit standing or credit capacity.

4. Make or use any untrue or misleading representations in the offer or sale of the services of a credit services organization or engage, directly or indirectly, in an act, practice or course of business which operates or would operate as a fraud or deception on a person in connection with the offer or sale of the services of a credit services organization.

§ 44-1704. Information statement; necessity and time of delivery to buyer; acknowledgment of delivery; retention on file

Before the execution of a contract or agreement between the buyer and a credit services organization or before the receipt by the credit services organization of monies or other valuable consideration, whichever occurs first, the credit services organization shall provide the buyer with a statement, in writing, containing all the information required by § 44-1705. The credit services organization shall maintain on file or microfilm for a period of two years an exact copy of the statement, personally signed by the buyer, acknowledging receipt of a copy of the statement.

§ 44-1705. Information statement; contents

The information statement shall include all of the following:

1. A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer credit reporting agency and the right of the buyer to receive a copy of that file, as provided by § 44-1693. The statement shall include the approximate price the buyer will be charged by the credit reporting agency for a copy of the file.

2. A complete and accurate statement of the buyer’s right to dispute the completeness or accuracy of any item contained in any file on the buyer maintained by any consumer credit reporting agency as provided by § 44-1694.

3. A complete and detailed description of the services to be performed by the credit services organization for or on behalf of the buyer and the total amount the buyer has to pay, or become obligated to pay, for the services.

4. If the credit services organization is required to obtain a surety bond pursuant to § 44-1703, the statement shall set forth both of the following:

(a) The buyer’s right to proceed against the bond under the circumstances and in the manner set forth in § 44-1708.

(b) The name and address of the surety company which issued the bond.

§ 44-1706. Contracts; requirements; contents

A. Every contract between the buyer and a credit services organization for the purchase of the services of the credit services organization must be in writing, be dated, be signed by the buyer and include all of the following:

1. A conspicuous statement in size equal to at least ten point type 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 of the transaction. See the attached notice of cancellation form for an explanation of this right.

2. 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 some other person.

3. 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 date by which the services are to be performed or the estimated length of time for performing the services.

4. The credit services organization’s principal business address and the name and address of its agent authorized to receive service of process.

B. The contract shall be accompanied by a completed form in duplicate, entitled “Notice of Cancellation”, which shall be attached to the contract and easily detachable and which shall contain in at least ten point type the following statement written in the same language as used in the contract: Notice of Cancellation
You may cancel this contract without any penalty or obligation within three days from the date the contract is signed.

If you cancel, any payment made by you under this contract will be returned within fifteen days after receipt by the credit services organization of your cancellation notice.

To cancel this contract, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, to _______________(Name of credit services organization) at _______________(Address of credit services organization) _______________(Place of business) not later than midnight ________(Date).

I hereby cancel this transaction. ________(Date)

____________________ (Purchaser’s signature)

C. A copy of the fully completed contract and all other documents the credit services organization requires the buyer to sign shall be given to the buyer at the time they are signed.