THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY WARD, D. WHITE, MENSCH, HUGHES, WAUGH, SOLOBAY, SCHWANK, ERICKSON, RAFFERTY, TARTAGLIONE AND BRUBAKER, JULY 21, 2011

REFERRED TO BANKING AND INSURANCE, JULY 21, 2011  

AN ACT

Providing for the licensure of persons providing debt settlement

services, for powers and duties of the Department of Banking

and for enforcement; and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 101.  Short title.

This act shall be known and may be cited as the Debt

Settlement Services Act.

Section 102.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Affiliate."  Any of the following:

(1)  A person hat directly controls, is controlled by or

is under common control with the licensee.

(2)  An officer of or an individual performing similar

functions with respect to the licensee.

(3)  A director of or an individual performing similar

functions with respect to the licensee.

(4)  An officer or director of or an individual

performing similar functions with respect to a person

described in paragraph (1).

"Agreement."  An agreement between a provider and an

individual for the performance of debt settlement services.

"Bank."  A financial institution, including a commercial

bank, savings bank, savings and loan association, credit union,

mortgage bank and trust company, engaged in the business of

banking, chartered under Federal or state law and regulated by a

Federal or state banking regulatory authority.

"Concessions."  Assent to repayment of a debt on terms more

favorable to an individual than the terms of the contract

between the individual and a creditor.

"Debt settlement services."  Services as an intermediary

between an individual and one or more unsecured creditors of the

individual for the purpose of obtaining concessions where the

contemplated concessions involve a reduction in principal of the

individual's unsecured debt, but does not include:

(1)  Legal services provided in an attorney-client

relationship by an attorney licensed or otherwise authorized

to practice law in this Commonwealth.

(2)  Accounting services provided in an accountant-client

relationship by a certified public accountant licensed to

provide accounting services in this Commonwealth.

(3)  Financial planning services provided in a financial

planner-client relationship by a licensed member of a

financial planning profession.

"Department."  The Department of Banking of the Commonwealth.

"Good faith."  Honesty in fact and the observance of

reasonable standards of fair dealing.

"Person."  An individual, corporation, business trust,

estate, trust, partnership, limited liability company,

association, joint venture or any other legal or commercial

entity. The term does not include a public corporation,

government or governmental subdivision, agency or

instrumentality.

"Principal amount of the debt."  The amount of a debt at the

time of the execution of the agreement.

"Program."  A program or strategy in which a provider

furnishes debt settlement services.

"Provider."  A person required to be registered pursuant to

this act and that provides, offers to provide or agrees to

provide debt settlement services.

"Record."  Information that is inscribed on a tangible medium

or that is stored in an electronic or other medium and is

retrievable in perceivable form.

Section 103.  Nonapplicability.

(a)  Providers.--This act does not apply to a provider to the

extent that the provider receives no compensation for debt

settlement services from or on behalf of the individuals to whom

it provides the services or from their creditors. 

(b)  Certain persons.--This act does not apply to the

following persons or their employees when the person or the

employee is engaged in the regular course of the person's

business or profession:

(1)  A judicial officer, a person acting under an order

of a court or an administrative agency or an assignee for the

benefit of creditors.

(2)  A bank, bank holding company or the subsidiary,

agent or affiliate of either, or a credit union or other

financial institution licensed under Federal or state law. 

(3)  A title insurer, escrow company or other person that

provides bill-paying services if the provision of debt

settlement services is incidental to the bill-paying

services.

CHAPTER 3

LICENSING

Section 301.  Licensing required.

(a)  General rule.--Except as otherwise provided in

subsection (b), on or after July 1, 2012, a provider may not

provide debt settlement services to an individual who it

reasonably should know resides in this Commonwealth at the time

it agrees to provide the services, unless the provider is

licensed under this act.

(b)  Nonapplicability.--If a provider is licensed under this

act, subsection (a) does not apply to an employee or agent of

the provider.

(c)  Listing.--The department shall maintain and publicize a

list of the names of all licensed providers.

Section 302.  Form of application and required documentation.

(a)  Form.--An application for licensure as a provider must

be in a form prescribed by the department.

(b)  Fee and documentation.--Subject to adjustment of dollar

amounts pursuant to section 901(f), an application for licensure

as a provider must be accompanied by:

(1)  The fee established by the department.

(2)  Evidence of minimum insurance in an amount specified

by the department.

(3)  In lieu of the aggregate umbrella insurance, a

surety bond filed with the department, in a form approved by

the department, for a term no less than the expiration of the

license and in the amount of not less than $10,000 or other

larger amount that the department determines is warranted by

the financial condition and business experience of the

provider, the history of the provider in performing debt

settlement services, the risk to individuals and any other

factor the department considers appropriate, but in no event

greater than $50,000. The surety bond shall run to the

Commonwealth for the benefit of this Commonwealth and of

individuals who reside in this Commonwealth when they agree

to receive debt settlement services from the provider, as

their interests may appear, payment of which is conditioned

upon noncompliance of the provider or its agent with this

act.

(4)  Proof that the provider is authorized by the laws of

this Commonwealth to conduct business in this Commonwealth.

Section 303.  Required information for application.

An application for licensure must be signed by the applicant

and declare as true any material matter pursuant to the

application for licensure. The application form shall contain a

statement informing the applicant that a false or dishonest

answer to a question may be grounds for denial or subsequent

suspension or revocation of the applicant's license. An

application shall include the following:

(1)  The applicant's name, principal business address and

telephone number, and all other business addresses in this

Commonwealth, electronic mail addresses and Internet website

addresses.

(2)  All names under which the applicant conducts

business.

(3)  The address of each location in this Commonwealth at

which the applicant will provide debt settlement services or

a statement that the applicant will have no such location.

(4)  The name and home address of each officer and

director of the applicant and each person that owns at least

10% of the applicant's business.

(5)  A statement describing, to the extent it is known or

should be known by the applicant, any material civil or

criminal judgment relating to financial fraud or misuse and

any material administrative or enforcement action relating to

financial fraud or misuse by a governmental agency in any

jurisdiction against the applicant, any of its officers,

directors, owners or agents.

(6)  A copy of each form of agreement that the applicant

will use with individuals who reside in this Commonwealth.

(7)  The schedule of fees and charges that the applicant

will use with individuals who reside in this Commonwealth.

(8)  A copy or description of the financial analysis or

budget that the provider will use in reviewing an

individual's financial condition.

(9)  A description of any ownership interest of at least

10% by a director, owner or employee of the applicant in:

(i)  any affiliate of the applicant; or

(ii)  any entity that provides products or services

to the applicant or any individual relating to the

applicant's debt settlement services.

(10)  The identity of each director who is an affiliate

of the applicant.

(11)  The applicant's financial statements, reviewed by

an accountant licensed in the state of the applicant's

principal place of business, for each of the two years

immediately preceding the application or, if the applicant

has not been in operation for the two years preceding the

application, for the period of its existence.

(12)  Evidence that the provider has a resident agent in

this Commonwealth for service of process.

(13)  A description of the three most commonly used

educational programs that the applicant provides or intends

to provide to individuals who agree to use the provider's

services and a copy of any materials used or to be used in

those programs.

Section 304.  Obligation to update application information.

An applicant or licensed provider shall notify the department

within 60 days after a change in the information specified in

section 302(b)(2) or section 303(1), (3) or (5).

Section 305.  Public availability of application information.

Except the addresses required by section 303(4) and the

proprietary information required by section 303(8), (9), (10)

and (11), the department shall make the information in an

application for licensure and renewal of licensure as a provider

available to the public.

Section 306.  Certificate of licensure.

(a)  Issuance.--Except as otherwise provided in subsection

(b), the department shall issue a certificate of licensure as a

provider to a person that complies with sections 302 and 303.

(b)  Grounds for denial.--The department may deny licensure

if:

(1)  The application contains information that is

materially erroneous or incomplete.

(2)  An officer, director or owner of the applicant has

been convicted of a crime, or suffered a civil judgment,

involving dishonesty or the violation of Federal or state

securities laws.  

(3)  The application is not accompanied by the fee

established by the department.

(4)  There is reasonable evidence to support the

department's opinion that the applicant will not operate as a

debt settlement services provider in a lawful, honest and

fair manner.

Section 307.  Procedure for licensure.

(a)  Time frame.--The department shall approve or deny an

initial license as a provider within 60 days after an

application is filed. The department may extend the 60-day

period for not more than 45 days. Within seven days after

denying an application, the department, in a record, shall

inform the applicant of the reasons for the denial.

(b)  Appeal.--If the department denies an application for

licensure as a provider or does not act on an application within

the time prescribed in subsection (a), the applicant may appeal

and request a hearing under 2 Pa.C.S. (relating to

administrative law and procedure).

(c)  Validity.--Subject to section 308(d), a license as a

provider is valid for one year.

(d)  Interim period.--Upon submission of an application for

licensure and until such time as an application is approved or

denied, the applicant may continue to provide debt settlement

services, but a denial of licensure terminates any further power

to provide services unless approved by the department.

Section 308.  License renewal.

(a)  Annual renewal.--A provider must obtain a renewal of its

license annually.

(b)  Application.--An application for renewal of a license as

a provider must be in a form prescribed by the department,

signed under penalty of false statement, and:

(1)  Be filed not less than 30 days nor more than 60 days

before the registration expires.

(2)  Be accompanied by the fee established by the

department.

(3)  Disclose any changes in the information contained in

the applicant's application for licensure or its immediately

previous application for renewal, as applicable.

(4)  Provide any other information that the department

reasonably requires to perform the department's duties under

this section.

(c)  Public information.--Except for the information required

by section 303(4), (8), (9), (10) and (11), the department shall

make the information in an application for renewal of licensure

as a provider available to the public.

(d)  Effectiveness.--If a licensed provider files a timely

and complete application for renewal of licensure, the license

remains effective until the department, in a record, notifies

the applicant of a denial and states the reasons for the denial.

(e)  Appeal.--If the department denies an application for

renewal of licensure as a provider, the applicant, within 30

days after receiving notice of the denial, may appeal and

request a hearing under 2 Pa.C.S. (relating to administrative

law and procedure), subject to section 903. While the appeal is

pending, the applicant shall continue to provide debt settlement

services to individuals with whom it has agreements. If the

denial is affirmed, subject to the department's order and

section 904, the applicant shall continue to provide debt

settlement services to individuals with whom it has agreements

until, with the approval of the department, it transfers the

agreements to another licensed provider.

Section 309.  Licensure in another state.

If a provider holds a license or certificate of registration

in another state authorizing it to provide debt settlement

services, the provider may submit a copy of that license or

certificate and the application for it instead of an application

in the form prescribed by section 302(a), 303 or 308(b). The

department shall accept the application and the license or

certificate from the other state as an application for

registration as a provider or for renewal of registration as a

provider, as appropriate, in this Commonwealth if:

(1)  The application in the other state contains

information substantially similar to or more comprehensive

than that required in an application submitted in this

Commonwealth.

(2)  The applicant, under penalty of false statement,

certifies that the information contained in the application

is current or, to the extent it is not current, supplements

the application to make the information current.

CHAPTER 5

PROVIDER RESPONSIBILITIES

Section 501.  Requirement of good faith.

A provider shall act in good faith in all matters under this

act.

Section 502.  Customer service.

A provider that is required to be licensed under this act

shall maintain a toll-free communication system, staffed at a

level that reasonably permits an individual to speak to a

customer-service representative, as appropriate, during ordinary

business hours.

Section 503.  Prerequisites for providing debt settlement

services.

(a)  List of goods and services.--Before providing debt

settlement services, a licensed provider shall give the

individual an itemized list of goods and services and the

charges for each. The list must be clear and conspicuous.

(b)  Financial analysis required.--A provider may not furnish

debt settlement services unless the provider has prepared a

financial analysis.

(c)  Financial analysis copy and information.--Before an

individual assents to an agreement to engage in a program, a

provider shall:

(1)  Provide the individual with a copy of the analysis

required by subsection (b) in a record that identifies the

provider and that the individual may keep whether or not the

individual assents to the agreement.

(2)  Inform the individual of the availability, at the

individual's option, of assistance by a toll-free

communication system or in person to discuss the financial

analysis required by subsection (b).

(d)  Information to be provided.--Before an individual

assents to an agreement to engage in a program, the provider

shall inform the individual of the following:

(1)  Programs are not suitable for all individuals.

(2)  Participation in a program may adversely affect the

individual's credit rating or credit scores.

(3)  Nonpayment of debt may lead creditors to increase

finance and other charges or undertake collection activity,

including litigation.

(4)  Unless the individual is insolvent, if a creditor

settles for less than the full amount of the debt, the

program may result in the creation of taxable income to the

individual, even though the individual does not receive any

money.

(5)  Specific results cannot be predicted or guaranteed

and the provider cannot force negotiations or settlements

with creditors but will advocate solely on behalf of the

individual.

(6)  Programs require that individuals meet a certain

savings goal in order to maximize settlement results.

(7)  The provider does not provide accounting or legal

advice to individuals, unless the provider is professionally

licensed to provide such advice.

(8)  The provider does not make monthly payments to the

individual's creditors.

(9)  The name and business address of the provider.

Section 504.  Communication by electronic or other means.

(a)  Compliance.--A provider may satisfy the requirements of

sections 503, 505 and 512 by means of the Internet or other

electronic means if the provider obtains a consumer's consent in

the manner provided by section 101(c)(1) of the Electronic

Signatures in Global and National Commerce Act (Public Law

106-229, 15 U.S.C. § 7001 et seq.).

(b)  Form.--The disclosures and materials required by

sections 503, 505 and 512 shall be presented in a form that is

capable of being accurately reproduced for later reference.

(c)  Written copy.--At the time of providing the materials

and agreement required by sections 503(c) and (d), 505 and 512,

a provider shall inform the individual that upon electronic,

telephonic or written request, it will send the individual a

written copy of the materials and shall comply with a request as

provided in subsection (f).

(d)  Request for written copy.--If a provider is requested,

before the expiration of 90 days after a program is completed or

terminated, to send a written copy of the materials required by

sections 503(c) and (d), 505 and 512, the provider shall send

the copy at no charge within three business days after the

request, but the provider need not comply with a request more

than once per calendar month or if it reasonably believes the

request is made for purposes of harassment. If a request is made

more than 90 days after a program is completed or terminated,

the provider shall send within a reasonable time a written copy

of the materials requested.

(e)  Disclosure.--A provider that maintains an Internet

website shall disclose on the home page of its Internet website

or on a page that is clearly and conspicuously connected to the

home page by a link that clearly reveals its contents:

(1)  Its name and all names under which it does business.

(2)  Its principal business address, telephone number and

electronic mail address, if any.

(f)  Withdrawal of consent.--Subject to subsection (g), if a

consumer who has consented to electronic communication in the

manner provided by section 101 of the Electronic Signatures in

Global and National Commerce Act (Public Law 106-229, 15 U.S.C.

§ 7001 et seq.), withdraws consent as provided in the Electronic

Signatures in Global and National Commerce Act, a provider may

terminate its agreement with the consumer. 

(g)  Termination of agreement.--If a provider wishes to

terminate an agreement with a consumer pursuant to subsection

(f), it shall notify the consumer that it will terminate the

agreement unless the consumer, within 30 days after receiving

the notification, consents to electronic communication in the

manner provided in section 101(c) of the Electronic Signatures

in Global and National Commerce Act.

(h)  Definition.--As used in this section, the term

"consumer" means an individual who seeks or obtains goods or

services that are used primarily for personal, family or

household purposes.

Section 505.  Form and contents of agreement.

(a)  Form and contents.--An agreement must:

(1)  Be in a record.

(2)  Be dated and signed by the individual.

(3)  Include the name of the individual and the address

where the individual resides.

(4)  Include the name, business address and telephone

number of the provider.

(5)  Be delivered to the individual immediately upon

formation of the agreement.

(6)  Disclose the following:

(i)  The services to be provided.

(ii)  The amount, or method of determining the

amount, of all fees, individually itemized, to be paid by

the individual.

(iii)  How the provider will comply with its

obligations under section 512(a).

(iv)  That the individual may cancel the agreement as

provided in this chapter.

(v)  That the individual may contact the department

with any questions or complaints regarding the provider.

(vi)  The address, telephone number and Internet

address or Internet website of the department.

(b)  Delivery.--For purposes of subsection (a)(5), delivery

of an electronic record occurs when it is made available in a

format in which the individual may retrieve, save and print it,

and the individual is notified that it is available.

(c)  Termination provision.--An agreement must provide that

the individual has a right to terminate the agreement at any

time by giving the provider written or electronic notice, in

which event all powers of attorney granted by the individual to

the provider are revoked and ineffective.

(d)  Restrictions.--An agreement may not:

(1)  Provide for application of the law of any

jurisdiction other than the United States and this

Commonwealth.

(2)  Except as permitted by 9 U.S.C. § 2 (relating to

validity, irrevocability, and enforcement of agreements to

arbitrate) and 42 Pa.C.S. Ch. 73 (relating to arbitration),

contain a provision that modifies or limits otherwise

available forums or procedural rights, including the right to

trial by jury, that are generally available to the individual

under law other than this act.

(3)  Contain a provision that restricts the individual's

remedies under this act or law other than this act.

(4)  Contain a provision that:

(i)  Limits or releases the liability of any person

for not performing the agreement or for violating this

act.

(ii)  Indemnifies any person for liability arising

under the agreement or this act.

(e)  Other rights and obligations.--All rights and

obligations specified in subsection (d) and section 506 exist

even if not provided in the agreement.

Section 506.  Bank accounts.

A provider may request or require an individual to place

funds in an account, separate from the individual's then-

existing bank account, to be used for the provider's fees and

for payments to creditors or debt collectors in connection with

the debt settlement services provided that:

(1)  The funds are held in an account at an insured

financial institution.

(2)  The individual owns the funds held in the account

and is paid accrued interest on the account, if any.

(3)  The entity administering the account is not owned or

controlled by, or in any way affiliated with, the provider.

(4)  The entity administering the account does not give

or accept any money or other compensation in exchange for

referrals of business involving the provider or program.

(5)  The individual may withdraw from the debt settlement

program at any time without penalty, and must immediately

receive all funds in the account, other than fees earned in

compliance with section 511.

Section 507.  Required language.

Unless the department, by regulation, provides otherwise, the

disclosures and documents required by this act must be in

English. If a provider communicates with an individual primarily

in a language other than English, the provider must furnish a

translation into the other language of the disclosures and

documents required by this act.

Section 508.  Fees and other charges.

(a)  Prohibition.--A provider may not impose, directly or

indirectly, a fee or other charge on an individual or receive

money from or on behalf of an individual for debt settlement

services except as permitted by this section.

(b)  Conditions.--A provider may not request or receive

payment of any fee or consideration until and unless:

(1)  the provider has settled the terms of at least one

debt pursuant to a settlement agreement or other such valid

contractual agreement executed by the individual;

(2)  the individual has made at least one payment

pursuant to that settlement agreement or other valid

contractual agreement between the individual and the creditor

or debt collector; and

(3)  the fee or consideration either:

(i)  bears the same proportional relationship to the

total fee for settling the terms of the entire debt

balance as the individual debt amount bears to the entire

debt amount. The individual debt amount and the entire

debt amount are those owed at the time the debt was

enrolled in the service; or

(ii)  is a percentage of the amount saved as a result

of the settlement. The percentage charged cannot change

from one individual debt to another. The amount saved is

the difference between the amount owed at the time the

debt was enrolled in the plan and the amount actually

paid to satisfy the debt.

(c)  Agreement.--A provider may not impose charges or receive

payment for debt settlement services until the provider and the

individual have signed an agreement that complies with sections

505 and 701.

(d)  Payment dishonored.--If a payment to a provider by an

individual under this act is dishonored, a provider may impose a

reasonable charge to the individual, not to exceed the amount

permitted by law.

Section 509.  Voluntary contributions.

A provider may not solicit a voluntary contribution from an

individual or an affiliate of the individual for any service

provided to the individual.

Section 510.  Voidable agreements.

(a)  Unauthorized fees.--If a provider imposes a fee or other

charge or receives money or other payments not authorized by

section 508, the individual may void the agreement and recover

as provided in section 905.

(b)  Nonregistered provider.--If a provider is not registered

as required by this act when an individual assents to an

agreement, the agreement is voidable by the individual.

(c)  Claim.--If an individual voids an agreement under this

section, the provider does not have a claim against the

individual for breach of contract or for restitution.

Section 511.  Termination of agreement.

If an individual who has entered into a fee agreement fails

for 60 days to make payments required by the agreement, a

provider may terminate the agreement.

Section 512.  Periodic reports and retention of records.

(a)  Accounting.--If a creditor has agreed to accept as

payment in full an amount less than the principal amount of the

debt owed by an individual, a provider who has established a

program for the individual shall document, in a record, an

accounting of all of the following:

(1)  The amount the creditor accepts as settlement in

full of the debt.

(2)  Any other terms of the settlement.

(3)  The amount of the debt when the creditor agreed to

the settlement.

(4)  For providers using fee agreements that calculate

any portion of the fee based on a percentage of savings the

individual realizes from a settled debt, the calculation of

that fee.

(b)  Records.--A provider shall maintain records for each

individual for whom it provides debt settlement services for

four years after the final payment made by the individual and

produce a copy of them to the individual within a reasonable

time after a request for them. The provider may use electronic

or other means of storage of the records.

CHAPTER 7

VIOLATIONS

Section 701.  Prohibited acts and practices.

A provider may not:

(1)  Exercise or attempt to exercise a power of attorney

after an individual has terminated an agreement.

(2)  Initiate a transfer from an individual's account at

a bank or with another person unless the transfer is:

(i)  A return of money to the individual.

(ii)  Before termination of an agreement, properly

authorized by the agreement and this act, for payment of

a fee.

(iii)  In payment of a creditor to fund a negotiated

settlement authorized by the individual.

(3)  Structure a settlement in a manner that would result

in a negative amortization of any of an individual's debts.

(4)  Settle a debt or lead an individual to believe that

a payment to a creditor is in settlement of a debt to the

creditor unless, at the time of settlement, the individual

receives a certification or confirmation by the creditor that

the payment is in full settlement of the debt, or is part of

a payment plan that is in full settlement of the debt.

(5)  Make a representation that:

(i)  The provider will furnish money to pay bills or

prevent attachments.

(ii)  Payment of a certain amount will guarantee

satisfaction of a certain amount or range of

indebtedness.

(iii)  Participation in a program will or may prevent

litigation, garnishment, attachment, repossession,

foreclosure, eviction or loss of employment.

(6)  Represent that it is authorized or competent to

furnish legal advice or perform legal services unless such

advice or services are provided by a licensed attorney

working with the provider.

(7)  Represent that it is a not-for-profit entity unless

it is organized and properly operating as a not-for-profit

under the law of the state in which it was formed or that it

is a tax-exempt entity unless it has received certification

of tax-exempt status from the Internal Revenue Service.

(8)  Take a confession of judgment or power of attorney

to confess judgment against an individual.

(9)  Employ an unfair, unconscionable or deceptive act or

practice, including the knowing omission of any material

information.

(10)  Purchase a debt or obligation of the individual.

Section 702.  Advertising.

A provider that advertises debt settlement services shall not

make statements that are misleading or deceptive, and the

advertisements shall not conflict with the information specified

in section 503(d)(2), (3) and (5).

CHAPTER 9

ADMINISTRATION AND ENFORCEMENT

Section 901.  Powers of department.

(a)  Action by department.--The department may act on its own

initiative or in response to complaints and may receive

complaints, take action to obtain voluntary compliance with this

act and seek or provide remedies as provided in this act.

(b)  Investigation.--The department may investigate and

examine, in this Commonwealth or elsewhere, by subpoena or

otherwise, the activities, books, accounts and records of a

person that provides or offers to provide debt settlement

services, or a person to which a provider has delegated its

obligations under an agreement or this act, to determine

compliance with this act. Information that identifies

individuals who have agreements with the provider shall not be

disclosed to the public. In connection with the investigation,

the department may:

(1)  Charge the person the reasonable expenses

necessarily incurred to conduct the examination.

(2)  Require or permit a person to file a statement under

oath as to all the facts and circumstances of a matter to be

investigated.

(c)  Regulations.--The department may adopt regulations to

implement the provisions of this act.

(d)  Fees.--The department, by rule, shall establish

reasonable fees to be paid by providers for the expense of

administering this act. The department shall use fees collected

under this act to defray the costs of administering this act.

(e)  Adjustment.--The department, by rule, shall adopt dollar

amounts instead of those specified in sections 302, 902 and 904

to reflect inflation, as measured by the United States Bureau of

Labor Statistics Consumer Price Index for All Urban Consumers

or, if that index is not available, another index adopted by

rule by the department. The department shall adopt a base year

and adjust the dollar amounts, effective on July 1 of each year,

if the change in the index from the base year, as of December 31

of the preceding year, is at least 10%. The dollar amount must

be rounded to the nearest $10.

(f)  Notification.--The department shall notify registered

providers of any change in dollar amounts made pursuant to

subsection (e) and make that information available to the

public.

Section 902.  Administrative remedies.

(a)  Enforcement.--The department may enforce this act and

rules adopted under this act by taking one or more of the

following actions:

(1)  Ordering a provider or a director, employee or other

agent of a provider to cease and desist from any violations. 

(2)  Ordering a provider or a person that has caused a

violation to correct the violation, including making

restitution of money or property to a person aggrieved by a

violation.

(3)  Imposing on a provider or a person that has caused a

violation a civil penalty not exceeding $1,000 for each

violation.

(4)  Prosecuting a civil action to enforce an order or to

obtain restitution or an injunction or other equitable

relief, or both.

(5)  Intervening in an action brought under section 904.

(b)  Additional penalty.--If a person violates or knowingly

authorizes, directs, or aids in the violation of a final order

issued under subsection (a)(1) or (2), the department may impose

an additional civil penalty not exceeding $1,000 for each

violation. 

(c)  Costs.--The department may recover the reasonable costs

of enforcing this act under subsections (a) and (b), including

attorney fees. 

(d)  Factors.--In determining the amount of a civil penalty

to impose under subsection (a) or (b), the department shall

consider the seriousness of the violation, the good faith of the

violator, any previous violations by the violator, the

deleterious effect of the violation on the public, the net worth

of the violator and any other factor the department considers

relevant to the determination of the civil penalty.

Section 903.  Suspension, revocation or nonrenewal of

registration.

(a)  General rule.--The department may suspend, revoke or

deny renewal of a provider's registration if:

(1)  A fact or condition exists that, if it had existed

when the registrant applied for registration as a provider,

would have been a reason for denying registration.

(2)  The provider has committed a material violation of

this act or a rule or order of the department under this act. 

(3)  The provider is insolvent.

(4)  The provider or an employee or affiliate of the

provider has refused to permit the department to make an

examination authorized by this act, failed to comply with

section 901(b)(2) within 30 days after request or made a

material misrepresentation or omission in complying with

section 901(b)(2).

(5)  The provider has not responded within a reasonable

time and in an appropriate manner to communications from the

department.

(b)  Appeal.--If the department suspends or revokes a

provider's registration, the provider may appeal and request a

hearing pursuant to 2 Pa.C.S. (relating to administrative law

and procedure).

(c)  Definition.--As used in this section, the term

"insolvent" means:

(1)  Having generally ceased to pay debts in the ordinary

course of business other than as a result of good-faith

dispute.

(2)  Being unable to pay debts as they become due.

(3)  Being insolvent within the meaning of 11 U.S.C

(relating to bankruptcy).

Section 904.  Private enforcement.

(a)  Agreement voided.--If an individual voids an agreement

under section 510, the individual may recover in a civil action

all money paid by or on behalf of the individual pursuant to the

agreement, in addition to the recovery under subsection (b)(3).

(b)  Violation.--Subject to subsection (c), an individual

with respect to whom a licensee violates this act may recover in

a civil action from the provider and any person that caused the

violation:

(1)  Compensatory damages for economic injury caused by

the violation.

(2)  Except as otherwise provided in subsection (c) and

subject to adjustment of the dollar amount pursuant to

section 901(f), with respect to a violation of section 503,

505, 506, 507, 508, 512 or 701, the greater of the amount

recoverable under paragraph (1) or $1,000.

(3)  Reasonable attorney fees and costs.

(c)  Class action.--In a class action, the minimum damages

provided in subsection (b)(2) do not apply.

(d)  Additional recovery.--In addition to the remedy

available under subsection (b), if a provider violates an

individual's rights under section 506, the individual may

recover in a civil action all money paid by or on behalf of the

individual pursuant to the agreement, except for amounts paid to

creditors.

(e)  Nonliability.--A provider is not liable under this

section for a violation of this act if the provider proves that

the violation was not intentional and resulted from a good faith

error notwithstanding the maintenance of procedures reasonably

adopted to avoid the error. If, in connection with a violation,

the provider has received more money than authorized by an

agreement or this act, the defense provided by this subsection

is not available unless the provider refunds the excess within

three business days after learning of the violation.

Section 905.  Violation of unfair or deceptive practices

statute.

If an act or practice of a provider violates both this act

and the act of December 17, 1968 (P.L.1224, No.387), known as

the Unfair Trade Practices and Consumer Protection Law, an

individual may not recover under both for the same act or

practice.

CHAPTER 21

MISCELLANEOUS PROVISIONS

Section 2101.  Relation to Electronic Signatures in Global and

National Commerce Act.

This act modifies, limits and supersedes the Electronic

Signatures in Global and National Commerce Act (Public Law

106-229, 15 U.S.C. § 7001 et seq.), but does not modify, limit

or supersede section 101(c) of the Electronic Signatures in

Global and National Commerce Act or authorize electronic

delivery of any of the notices described in section 103(b) of

the Electronic Signatures in Global and National Commerce Act. 

Section 2102.  Transitional provisions.

Transactions entered into before this act takes effect and

the rights, duties and interests resulting from them may be

completed, terminated or enforced as required or permitted by a

law amended, repealed or modified by this act as though the

amendment, repeal or modification had not occurred.

Section 2103.  Repeal.

Repeals are as follows:

(1)  The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate this act.

(2)  The act of October 9, 2008 (P.L.1421, No.117), known

as the Debt Management Services Act, is repealed.

Section 2104.  Effective date.

This act shall take effect in 60 days.