6.1-363.16 - (Repealed effective October 1, 2010) Required and prohibited business methods.
§ 6.1-363.16. (Repealed effective October 1, 2010) Required and prohibitedbusiness methods.
Each licensee shall comply with the following requirements:
1. Each DMP shall be evidenced by an agreement, which shall be maintained ineither a hard copy, including a faxed copy, or electronic version and whichshall be signed by the consumer and a person authorized by the licensee tosign such agreements and dated the same day the DMP is executed by theconsumer. The agreement may be signed by the parties either originally or byelectronic signature. The agreement shall set forth, at a minimum: (i) thename and address of both the consumer and the licensee; (ii) a fulldescription of all services to be performed for the consumer by the licensee;(iii) a clear explanation, highlighted in bold type, of the costs to theconsumer; (iv) a statement that the DMP agreement can be terminated for anyreason by the consumer and that the consumer has no obligation to continuethe arrangement unless satisfied with the services provided; (v) a statementthat in the event of termination of the agreement, the consumer shall beentitled to a refund of all funds that have not been disbursed to creditorsand either (a) all fees paid if terminated within five days of the date theDMP agreement is executed by the consumer or (b) all fees paid less theset-up fee if terminated more than five but less than 31 days after executionby the consumer; (vi) an explanation of the method of dispute resolutionunder the agreement; (vii) an explanation of the obligations of the consumerand the licensee that are subject to the agreement; (viii) notification ofprivacy policies in compliance with state and federal laws and regulations;and (ix) a statement that the provision of DMP or debt pooling anddistribution services may have a derogatory effect upon the consumer's creditreport.
2. A licensee shall give to the consumer a duplicate original of theagreement executed by the consumer and licensee upon full execution.
3. At the time of execution of the DMP, a licensee shall have a good faithbelief that the creditors listed in the DMP will participate in the DMP. Alicensee shall advise the consumer of any changes by the creditor inaccepting payments under the DMP promptly upon learning of such changes.
4. A licensee shall provide a consumer enrolled in a DMP with periodicstatements, no less often than quarterly, accounting for the funds receivedfrom the consumer for payments to the consumer's creditors and disbursementsmade to each such creditor on the consumer's behalf since the last report.
5. A licensee shall not purchase any debt or obligation of a consumer.
6. A licensee shall not lend money or provide credit to any consumer.
7. A licensee shall not obtain a mortgage or any other security interest inthe property of a consumer.
8. A licensee shall not operate as a debt collector.
9. A licensee shall not structure an agreement for the consumer that, at theconclusion of the DMP, would knowingly result in negative amortization of anyof the consumer's obligations to creditors.
10. A licensee shall not give legal advice to a consumer or perform legalservices on behalf of a consumer.
11. A licensee shall have an established practice of disbursing to creditorsfunds received from a consumer under a DMP within eight business days ofreceipt. Consumers shall be provided in writing with the disbursementpractices of the licensee and the circumstances that would establish anexception to the eight-day practice.
12. A licensee shall maintain appropriate safeguards against conflicts ofinterest in the conduct of its DMP activities. A licensee shall not employany person who is employed at the same time by a creditor or collectionagency.
13. A licensee shall keep its operating funds separate from the fundsentrusted to the licensee by consumers for disbursement to creditors.Consumers' funds shall be kept in a trust account, held in the name of thelicensee by an insured depository institution.
14. A licensee shall upon request give a consumer signed, dated receipts forfunds received from a consumer under a DMP, or provide a means whereby theconsumer may view the status of his account electronically.
15. A licensee shall not obtain any agreement from a consumer (i) giving thelicensee or any third person power of attorney or authority to confessjudgment for the borrower; (ii) authorizing the licensee or any third partyto bring suit against the borrower in a court outside the Commonwealth; or(iii) waiving any right the borrower has under this chapter.
(2004, c. 790.)