To amend section 4710.01 and to enact sections 4710.20 to 4710.43 of the Revised Code to establish licensing and regulation of debt settlement services.

Section 1. That section 4710.01 be amended and sections 4710.20, 4710.21, 4710.22, 4710.23, 4710.24, 4710.25, 4710.26, 4710.27, 4710.28, 4710.29, 4710.30, 4710.31, 4710.32, 4710.33, 4710.34, 4710.35, 4710.36, 4710.37, 4710.38, 4710.39, 4710.40, 4710.41, 4710.42, and 4710.43 of the Revised Code be enacted to read as follows:

Sec. 4710.01.  As used in this chapter:

(A) "Person" includes individuals, partnerships, associations, corporations, trusts, and other legal entities.

(B) "Debt adjusting" means doing business in debt adjusting, budget counseling, debt management, or debt pooling service, or holding oneself out, by words of similar import, as providing services to debtors in the management of their debts, to do either of the following:

(1) To effect the adjustment, compromise, or discharge of any account, note, or other indebtedness of the debtor;

(2) To receive from the debtor and disburse to the debtor's creditors any money or other thing of value.

"Debt adjusting" does not include debt settlement service as defined in section 4710.20 of the Revised Code.

(C) "Resides" means to live in a particular place on a temporary or a permanent basis.

Sec. 4710.20.  As used in sections 4710.20 to 4710.43 of the Revised Code:

(A) "Affiliate" means a person that controls, is controlled by, or is under common control with the licensee.

(B) "Agreement" means an agreement between a provider and an individual for the performance of debt settlement services.

(C) "Business address" means the physical location of a business, including the name and number of a street.

(D) "Concessions" means 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.

(E) "Day" means a calendar day.

(F) "Debt settlement services" means the services as an intermediary between an individual and one or more unsecured creditors of the individual for the purpose of obtaining concessions and without receiving money from the individual for distribution of that money to the individual's creditor, but does not include any of the following:

(1) Legal services provided in an attorney-client relationship by an attorney licensed or otherwise authorized to practice law in this state;

(2) Accounting services provided in an accountant–client relationship by a certified public accountant licensed to provide accounting services in this state; or

(3) Financial planning services provided in a financial planner-client relationship by a member of a financial planning profession who holds current certification by the certified financial planner board of standards, inc.

(G) "Financial institution" means any national bank, any bank doing business under authority granted by the superintendent of financial institutions or the regulatory authority of another state of the United States, any federal savings association, any savings and loan association or savings bank doing business under authority granted by the superintendent or the regulatory authority of another state of the United States, or any credit union regulated by a state or federal regulatory authority.

(H) "Good faith" means honesty in fact and the observance of reasonable standards of fair dealing.

(I) "Person" means 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.

(J) "Program" means a program or strategy in which a provider furnishes debt settlement services, which contemplate that creditors will settle debts for less than the full amount of debt owed by an individual, and in which the individual makes payments directly to the creditors.

(K) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form.

(L) "Sign" means, with present intent to authenticate or adopt a record:

(1) To execute or adopt a tangible symbol; or

(2) To attach to or logically associate with the record an electronic sound, symbol, or process.

(M) "State" means, except when the context indicates the term is referring to the state of Ohio, a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(N) "Settlement" means an arrangement under which a creditor accepts concessions on an individual's account resulting from negotiations conducted by a provider of debt settlement services and money is paid to the creditor.

Sec. 4710.21.  (A) No person shall provide debt settlement services for compensation without first having obtained a license, from the director of commerce under sections 4710.20 to 4710.43 of the Revised Code, for each business location to be maintained by the person for the transaction of business in this state.

(B) Sections 4710.20 to 4710.43 of the Revised Code do 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 financial institution, bank holding company, or the subsidiary, agent, or affiliate of either;

(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;

(4) An employee of a licensee who is working under the supervision of the licensee at the place of business maintained under a license issued pursuant to sections 4710.20 to 4710.43 of the Revised Code.

Sec. 4710.22.  (A) Application for an original or renewal license to provide debt settlement services shall be in writing, signed under oath, and in the form prescribed by the director of commerce. 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. The application for an original or renewal license shall be accompanied by a license fee as determined by the director by rule, and shall contain all of the following:

(1) The applicant's name, principal business address and telephone number, and all of the applicant's other business addresses in this state, electronic mail addresses, and internet web site addresses;

(2) All names under which the applicant conducts business;

(3) The address of each location in this state at which the applicant will provide debt settlement services or a statement that the applicant does not maintain a physical location in the state;

(4) The name and home address of each officer and director of the applicant and each person that owns at least ten per cent 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, any material violation of state or federal securities laws, 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 state;

(7) The schedule of fees and charges that the applicant will use with individuals who reside in this state;

(8) A copy or description of any ownership interest of at least ten per cent by a director, owner, or employee of the applicant's debt settlement services;

(9) A description of any ownership interest of at least ten per cent by a director, owner, or employee of the applicant in:

(a) Any affiliate of the applicant; or

(b) 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) Evidence that the applicant has a resident agent in the state recorded with the secretary of state;

(12) Any other information that the director reasonably requires to perform the director's duties, which the director may require by rule.

(B) The director may, upon receipt and review of an application, request additional information that the director reasonably requires to perform the director's duties.

(C) The term of any license issued pursuant to sections 4710.20 to 4710.43 of the Revised Code shall not be more than one year. Licensees who wish to renew their license must submit an application for renewal at least thirty days, but not more than sixty days, before the license expiration date.

(D) If a person who provides debt settlement services holds a license or certificate of registration in another state authorizing it to provide debt settlement services, the person may submit a copy of that license or certificate and the application for it instead of the application in the form prescribed by this section if all of the following apply:

(1) The application in the other state contains information substantially similar to or more comprehensive than that required in an application submitted in this state.

(2) The applicant provides the information required by divisions (A)(1), (3), (6), and (7) of this section.

(3) The applicant certifies that the information contained in the application is current, and to the extent it is not current, supplements the application to make the information current.

Sec. 4710.23.  (A) The director of commerce shall issue an original or renewal certificate of licensure to the applicant unless the director finds any of the following:

(1) The applicant has not complied with the requirements of section 4710.22 of the Revised Code.

(2) The application contains information that is materially erroneous or incomplete.

(3) 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 state or federal securities laws.

(4) The application is not accompanied by the fee established by the director.

(5) There is reasonable evidence to support the director's opinion that the applicant will not provide debt settlement services in a lawful, honest, and fair manner.

(B) The director shall approve or deny an initial license within sixty days after an application is filed. In connection with a request pursuant to division (B) of section 4710.22 of the Revised Code for additional information, the director may extend the sixty-day period for not more than forty-five days.

(C) If a licensee has filed a timely and complete application for license renewal, the license remains in effect until the director notifies the applicant of a denial.

(D) Within seven days after issuing an order denying an application the director shall notify the applicant of the denial, the grounds for the denial, and the applicant's opportunity for a hearing pursuant to Chapter 119. of the Revised Code. If the application is denied, the superintendent shall return the annual license fee.

(E) If the director has denied an application for a renewal license, the licensee, within thirty days after receiving notice of the denial, may appeal and request a hearing in accordance with Chapter 119. of the Revised Code. While an appeal is pending, the licensee shall continue to provide debt settlement services to individuals with whom the licensee has agreements. If the licensee's appeal fails, the licensee may, with the approval of the director, continue to provide debt settlement services to individuals with whom it has agreements until the licensee transfers the agreements to another licensee.

Sec. 4710.24.  Not more than one license shall be issued under sections 4710.20 to 4710.43 of the Revised Code per single place of business, but the director of commerce may issue additional licenses for other places of business to the same licensee upon compliance with those sections.

No change in the place of business of a licensee shall be permitted under the same license. When a licensee wishes to change the licensee's place of business the licensee shall give written notice thereof in advance to the director who shall provide a license for the new address, without cost.

Sec. 4710.25.  No person licensed under sections 4710.20 to 4710.43 of the Revised Code shall conduct business in this state unless the licensee has obtained and maintains in effect at all times a corporate surety bond issued by a bonding company or insurance company authorized to do business in this state. The bond shall be in favor of the director of commerce and in a penal sum the director determines is warranted by the financial condition and business experience of the licensee, the history of the licensee in performing debt settlement services, the risk to individuals, and any other factor the director considers appropriate. The penal sum shall be at least ten thousand dollars and not more than fifty thousand dollars.

The term of the bond shall coincide with the term of the license. The licensee shall file a copy of the bond with the superintendent. The bond shall be for the exclusive benefit of any individual injured by a violation of or failure to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code by a licensee or an employee of a licensee.

Sec. 4710.26.  A licensee shall do all of the following:

(A) Act in good faith when engaging in the business of debt settlement services;

(B) 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;

(C) Establish an internal formal complaint policy that creates a process for the licensee to receive, review, and address or resolve formal complaints internally. The availability of this process shall be communicated in writing to individuals enrolled in the licensee's program. This policy shall include a provision that all consumers who file a formal complaint shall receive a response from the licensee within a reasonable time from the licensee's receipt of such complaint. The licensee shall maintain a file for each such formal complaint that documents the complaint, the licensee's actions in response to the complaint, and if and how the complaint was resolved.

(D) Provide all disclosures and documents required by sections 4710.20 to 4710.43 of the Revised Code in English and in any other language the licensee has or will use primarily to communicate with the individual.

Sec. 4710.27.  (A) Before providing debt settlement services, a licensee shall give the individual an itemized list of goods and services and the charges for each. The list must be clear and conspicuous.

(B) A licensee may not furnish debt settlement services unless the licensee has prepared a financial analysis with respect to the income and debts of the individual seeking service.

(C) Before an individual assents to an agreement to engage in a program, a licensee shall do the following:

(1) Provide the individual with a copy of the financial analysis required by division (B) of this section in a record that identifies the licensee 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 division (B) of this section.

(D) Before an individual assents to an agreement to engage in a program, the licensee 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) 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 if the individual does not receive any money.

(5) Specific results cannot be predicted or guaranteed and the licensee 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 licensee does not provide accounting or legal advice to individuals, unless the licensee is professionally licensed to provide such advice.

(8) The licensee is the individual's advocate and may not receive compensation from creditors, financial institutions, or third-party collection agencies.

(9) The licensee does not make payments to the individual's creditors.

(10) The name and business address of the licensee.

Sec. 4710.28.  (A) As used in this section:

(1) "Federal act" means the "Electronic Signatures in Global and National Commerce Act," 114 Stat. 464, 15 U.S.C. 7001 et seq., as amended.

(2) "Consumer" means an individual who seeks or obtains goods or services that are used primarily for personal, family, or household purposes.

(B) A licensee may satisfy the requirements of sections 4710.27, 4710.29, and 4710.35 of the Revised Code by utilizing the internet or other electronic means if the licensee obtains a consumer's consent in the manner provided for in the federal act.

(C) The disclosures and materials required by sections 4710.27, 4710.29, and 4710.35 of the Revised Code shall be presented in a form that is capable of being accurately reproduced for later reference.

(D) With respect to disclosure by means of an internet web site, the disclosure of the information required by division (D) of section 4710.27 of the Revised Code must appear on one or more screens that contain no other information, and the individual must indicate that the individual has seen the information before proceeding to assent to formation of a program.

(E) At the time of providing the materials and agreement required by divisions (C) and (D) of section 4710.27, and sections 4710.29 and 4710.35 of the Revised Code, a licensee 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 division (F) of this section.

(F) If a licensee is requested, before the expiration of ninety days after a program is completed or terminated, to send a written copy of the materials required by divisions (C) and (D) of section 4710.27, and sections 4710.29 and 4710.35 of the Revised Code, the licensee shall send them at no charge within three business days after the request is made, but the licensee 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 ninety days after a program is completed or terminated, the licensee shall send within a reasonable time a written copy of the materials requested.

(G) A licensee that maintains an internet web site shall disclose on the home page of its web site or on a page that is clearly and conspicuously connected to the home page by a link that clearly reveals its contents all of the following:

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

(2) Its principal business address, telephone number, and electronic mail address, if any.

(H) Subject to division (I) of this section, if a consumer who has consented to electronic communication in the manner provided by section 101 of the federal act withdraws consent as provided in the federal act, a licensee may terminate its agreement with the consumer.

(I) If a licensee wishes to terminate an agreement with a consumer pursuant to division (H) of this section, it shall notify the consumer that it will terminate the agreement unless the consumer, within thirty days after receiving the notification, consents to electronic communication in the manner provided in section 101(c) of the federal act.

(J) This section modifies, limits, and supersedes the federal act, but does not modify, limit, or supersede section 101(c) of that act or authorize electronic delivery of any of the notices described in section 103(b) of that act.

Sec. 4710.29.  (A) An agreement must meet the following requirements:

(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 licensee;

(5) Be delivered to the individual immediately upon formation of the agreement;

(6) Disclose all of the following:

(a) The services to be provided;

(b) The amount or method of determining the amount of all fees, individually itemized, to be paid by the individual;

(c) How the licensee will comply with its obligations under section 4710.35 of the Revised Code;

(d) That the individual may cancel the agreement as provided in section 4710.30 of the Revised Code;

(e) That the individual may contact the director of commerce with any questions or complaints regarding the licensee;

(f) The address, telephone number, and internet address or web site of the director.

(B) For purposes of division (A)(5) of this section, delivery of an electronic record occurs when it is made available in a format in which the individual may retrieve, save, and print the record, and the individual is notified that it is available.

(C) If the director supplies the licensee with any information required under division (A)(6)(f) of this section, the licensee may comply with that requirement only by disclosing the information supplied by the director.

(D) An agreement must provide that the individual has a right to terminate the agreement at any time by giving the licensee written or electronic notice, in which event all powers of attorney granted by the individual to the licensee are revoked and ineffective.

(E) In accordance with section 4710.30 of the Revised Code, an agreement must be accompanied by a form that contains the following in boldface type, surrounded by bold black lines:

"Notice of right of cancellation:

You may cancel this agreement, without any penalty or obligation, at any time before midnight of the third business day after the day you agree to it by electronic communication or by signing it.

To cancel this agreement during this period, send an e-mail to [e-mail address of licensee] or mail or deliver a signed, dated copy of this notice, or any other written notice to [name of licensee] at [address of licensee] before midnight of the third business day after the day you execute this agreement.

If you cancel this agreement within the 3-day period, we will refund all money you already have paid us.

I cancel this agreement,

____________________

Print your name

____________________

Signature

____________________

Date"

(F) An agreement may confer on a licensee a power of attorney to settle up to fifty per cent of an individual's debt. An agreement may not confer a power of attorney to negotiate with creditors of the individual on behalf of the individual. An agreement must state that the licensee will obtain the assent of the individual after a creditor has assented to a settlement for more than fifty per cent of the amount of the individual's debt.

(G) An agreement may not do the following:

(1) Provide for application of the law of any jurisdiction other than the United States and this state;

(2) Except as permitted by Section 2 of the "Federal Arbitration Act," 61 Stat. 669, 9 U.S.C. 1, et seq., as amended, 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;

(3) Contain a provision that restricts the individual's remedies under sections 4710.20 to 4710.43 of the Revised Code, or other law;

(4) Contain a provision that does the following:

(a) Limits or releases the liability of any person for not performing the agreement or for violating sections 4710.20 to 4710.43 of the Revised Code;

(b) Indemnifies any person for liability arising under the agreement or sections 4710.20 to 4710.43 of the Revised Code.

(H) All rights and obligations specified in division (D) of this section and section 4710.30 of the Revised Code apply even if not recited in the agreement.

Sec. 4710.30.  An individual may cancel an agreement before midnight of the third business day after the individual assents to it, unless the agreement does not comply with section 4710.29 or 4710.34 of the Revised Code, in which event the individual may cancel the agreement within thirty days after the individual assents to it. To exercise the right of cancellation, the individual must give notice in a record to the licensee. Notice by mail is given when mailed.

Sec. 4710.31.  (A) A licensee 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) A debt settlement service fee or charge must be derived from a settlement between a creditor and debtor, negotiated by the licensee. The total fee or charge may not exceed fifteen per cent of the principal amount of the debt being settled in the settlement. The fee or charge shall be collected at a rate of not more than one per cent per month, or if the payment plan included in the settlement is less than fifteen months in length, in equal monthly payments for the term of the settlement. The debtor may voluntarily accelerate or prepay any unpaid installment fee or charge, and the licensee may collect the fee or charge on a pro rata basis once the licensee has a finalized settlement from the creditor. The licensee may charge an additional fee not to exceed five per cent of the amount equal to the principal amount of the debt being settled minus the amount to be paid under the settlement.

(C) A licensee may not impose fees or charges or receive payment for debt settlement services until a settlement has been executed in the form required under division (C) of section 4710.35 of the Revised Code. If the settlement calls for money to be paid to the creditor in installments, the licensee may collect, at the time the installment payment is made, a debt settlement service fee or charge for each installment payment, provided that the total fee or charge is proportionally distributed equally among the total number of installment payments.

(D) A licensee may not impose fees or charges or receive payment for debt settlement services until the licensee and the individual have signed an agreement that complies with sections 4710.29 and 4710.34 of the Revised Code.

(E) A licensee may impose a reasonable charge to the individual, plus any amount passed on from a financial institution for each check, negotiable order of withdrawal, share draft, or other negotiable instrument returned or dishonored for any reason, provided that the terms and conditions upon which such insufficient funds charges will be charged to the individual are set forth in the agreement.

(F) A licensee may not solicit or accept a voluntary contribution from an individual or on behalf of an individual.

Sec. 4710.32.  (A) If a licensee imposes a fee or other charge or receives money or other payments not authorized by section 4710.31 of the Revised Code, the individual may void the agreement and recover as provided for in section 4710.41 of the Revised Code.

(B) If a person providing debt settlement services is not licensed as required by section 4710.21 of the Revised Code when an individual assents to an agreement, the agreement is voidable by the individual.

(C) If an individual voids an agreement under this section, the licensee or person providing debt settlement services without a license does not have a claim against the individual for breach of contract or for restitution.

Sec. 4710.33.  If an individual who has entered into a fee agreement fails for sixty days to make payments required by the agreement, a licensee may terminate the agreement.

Sec. 4710.34.  (A) A licensee may not do any of the following:

(1) Settle a debt on behalf of an individual for more than fifty per cent of the amount of the debt owed a creditor, unless the individual assents to the settlement after the creditor has assented;

(2) Take a power of attorney that authorizes the licensee to settle a debt, unless the power of attorney expressly limits the licensee's authority to settle debts for not more than fifty per cent of the amount of the debt owed a creditor;

(3) Exercise or attempt to exercise a power of attorney after an individual has terminated an agreement;

(4) Initiate a transfer of money from an individual's account at a financial institution or with another person, unless the transfer is one of the following:

(a) A return of money to the individual;

(b) Before termination of an agreement, properly authorized by the agreement for payment of a fee;

(c) In payment of a creditor to fund a negotiated settlement authorized by an individual under division (A)(1) of this section or through a power of attorney under division (A)(2) of this section;

(d) In payment of a creditor to fund a negotiated settlement of which both the settlement and transfer of money had been authorized by the debtor.

(5) Structure a settlement in a manner that would result in a negative amortization of any of an individual's debts;

(6) 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;

(7) Represent that:

(a) The licensee will furnish money to pay bills or prevent attachments;

(b) Payment of a certain amount will guarantee satisfaction of a certain amount or range of indebtedness; or

(c) Participation in a program will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.

(8) Represent that the licensee is authorized or competent to furnish legal advice or perform legal services, unless such advice or services is provided by a licensed attorney working with the licensee;

(9) Represent that it is one of the following:

(a) A not-for-profit entity, unless it is organized and properly operating as a not-for-profit entity under the laws of this state;

(b) A tax-exempt entity, unless it has received certification of tax-exempt status from the federal internal revenue service.

(10) Take a confession of judgment or power of attorney to confess judgment against an individual;

(11) Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.

(B) If a licensee furnishes debt settlement services to an individual, the licensee may not do any of the following, directly or indirectly:

(1) Purchase a debt or obligation of the individual;

(2) Receive from or on behalf of the individual any of the following:

(a) A promissory note or other negotiable instrument other than a check or a demand draft;

(b) A post-dated check or demand draft.

(3) Lend money to provide credit to the individual, except as a deferral of a fee payment at no additional expense to the individual;

(4) Obtain a mortgage or other security interest from any person in connection with the services provided to the individual;

(5) Disclose the identity or identifying information of the individual or the identity of the individual's creditors, except in the following circumstances:

(a) To the director of commerce, upon proper demand;

(b) To a creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a program;

(c) To the extent necessary to administer the program;

(d) As permitted by federal law.

(6) Except as otherwise provided in section 4710.31 of the Revised Code, provide the individual less than the full benefit of a compromise of a debt arranged by the licensee;

(7) Furnish legal advice or perform legal services, unless the person furnishing that advice to, or performing those services for, the individual is licensed to practice law;

(8) Advise individuals to stop payment on any of the accounts being handled by the licensee;

(9) Receive compensation from creditors, financial institutions, or third-party collection agencies, as a result of providing debt settlement services to an individual.

(C) A licensee 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 divisions (D)(2), (3), and (5) of section 4710.27 of the Revised Code.

Sec. 4710.35.  (A) A licensee shall provide the accounting required by division (B) of this section in accordance with the following requirements:

(1) At the following times while the agreement is in effect:

(a) After each settlement of debt with a creditor on behalf of the individual;

(b) Within five business days after a request by an individual, but the licensee need not comply with more than one request in any calendar month.

(2) Upon cancellation or termination of an agreement.

(B) If a creditor has agreed to accept as payment in full an amount less than the full amount of the debt owed by an individual, the licensee 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 licensees 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.

(C) A settlement must be in writing, indicate the assent of the creditor and the debtor or the debtor's attorney in fact through endorsement, and clearly set forth the original amount of the debt, the amount the creditor has agreed to accept as payment in full of the debt, and the difference between these amounts which shall be the amount of debt forgiven.

(D) A licensee 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 is made for them. The licensee may use electronic or other means of storage of the records.

Sec. 4710.36.  (A) The director of commerce may do the following:

(1) Act on the director's own initiative or in response to complaints and may receive complaints regarding, or take action to obtain voluntary compliance with, sections 4710.20 to 4710.43 of the Revised Code;

(2) Seek or provide remedies as provided for in section 4710.38 of the Revised Code.

(B) The director may investigate and examine, by subpoena or otherwise, the activities, books, accounts, and records of a licensee, or a person to which a licensee has delegated its obligations under an agreement, to determine compliance with sections 4710.20 to 4710.43 of the Revised Code. Information that identifies individuals who have agreements with the licensee shall not be disclosed to the public. In connection with the investigation, the director may do the following:

(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) The director may adopt rules in accordance with Chapter 119. of the Revised Code to implement the provisions of sections 4710.20 to 4710.43 of the Revised Code.

(D) The director may enter into cooperative arrangements with any other federal or state agency having authority over licensees and may exchange with any of those agencies information about a licensee, including information obtained during an examination of the licensee.

Sec. 4710.37.  (A) As used in this section, "consumer price index" means the consumer price index prepared by the United States bureau of labor statistics (U.S. city average for urban wage earners and clerical workers: all items, 1982-1984=100) or, if that index is no longer published, a generally available comparable index.

(B) The director of commerce, by rule adopted in accordance with Chapter 119. of the Revised Code, shall establish reasonable fees to be paid by licensees for the expense of administering sections 4710.20 to 4710.43 of the Revised Code. All fees, charges, and penalties collected under sections 4710.20 to 4710.43 of the Revised Code shall be paid to the director and shall be deposited by the director into the state treasury to the credit of the debt settlement services fund, which is hereby created. Funds in the debt settlement services fund shall be used for administering sections 4710.20 to 4710.43 of the Revised Code.

(C) The director, by rule adopted in accordance with Chapter 119. of the Revised Code, shall establish the dollar amounts for license fees under section 4710.22 of the Revised Code and shall establish that license fees under section 4710.22, and penalties collected under section 4710.38 of the Revised Code, shall adjust to reflect inflation, as measured by the consumer price index. The director 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 ten per cent. The dollar amount must be rounded to the nearest ten dollars.

(D) The director shall notify licensees of any change in dollar amounts made pursuant to division (C) of this section and make that information available to the public.

Sec. 4710.38.  (A) The director of commerce shall enforce sections 4710.20 to 4710.43 of the Revised Code and any rule adopted pursuant to section 4710.36 of the Revised Code by taking one or more of the following actions:

(1) Ordering a licensee or a director, employee, or other agent of a licensee to cease and desist from any violations;

(2) Ordering a licensee or a person that has caused a violation to correct the violation or that has failed to comply with those sections to correct the failure, including making restitution of money or property to a person aggrieved by a violation or failure to comply;

(3) Imposing on a licensee or a person that has caused a violation or has failed to comply a civil penalty not exceeding one thousand dollars for each violation or failure to comply;

(4) Prosecuting a civil action to do either of the following:

(a) Enforce an order;

(b) Obtain restitution or an injunction or other equitable relief, or both.

(5) Intervening in an action brought under section 4710.39 of the Revised Code.

(B) If a person violates or fails to comply with, or knowingly authorizes, directs, or aids in the violation of or failure to comply with, a final order issued under division (A)(1) or (2) of this section, the director may impose an additional civil penalty not exceeding one thousand dollars for each violation or failure.

(C) The director may maintain an action to enforce sections 4710.20 to 4710.43 of the Revised Code in any county.

(D) The director may recover the reasonable costs of enforcing divisions (A), (B), and (C) of this section, including attorney's fees based on the hours reasonably expended and the hourly rates for attorneys of comparable experience in the community.

(E) In determining the amount of a civil penalty to impose under division (A) or (B) of this section, the director shall consider the seriousness of the violation or failure, the good faith of the person committing the violation or failure, any previous violations or failures by the person, the deleterious effect of the violation or failure on the public, and any other factor the director considers relevant to the determination of the civil penalty.

(F) No enforcement action or adjudication order made by the director under this section shall be valid unless an opportunity for a hearing is afforded in accordance with Chapter 119. of the Revised Code. Such opportunity for a hearing shall be given before taking the enforcement action or making the adjudication order except in those situations where section 119.06 of the Revised Code provides otherwise.

Sec. 4710.39.  The director of commerce shall publish and maintain, on the department of commerce internet web site, a current list of all providers licensed under sections 4710.20 to 4710.43 of the Revised Code.

Sec. 4710.40.  (A) As used in this section, "insolvent" means:

(1) Having generally ceased to pay debts in the ordinary course of business other than as a result of a good-faith dispute;

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

(3) Being insolvent within the meaning of the federal bankruptcy law.

(B) The director may suspend, revoke, or deny renewal of a license if any of the following apply:

(1) A fact or condition exists that, if it had existed when the licensee applied for a license, it would have been a reason for denial.

(2) The licensee has committed a material violation of or failure to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code or a rule or order of the director.

(3) The licensee is insolvent.

(4) The licensee or an employee or affiliate of the licensee has refused to permit the director to make an examination authorized by section 4710.36 of the Revised Code, failed to comply with an order to file a statement pursuant to division (B)(2) of section 4710.36 of the Revised Code within thirty days after the request, or made a material misrepresentation or omission with regard to such statement.

(5) The licensee has not responded within a reasonable time and in an appropriate manner to communications from the director.

(C) If the director suspends or revokes a license, the licensee may appeal and request a hearing pursuant to Chapter 119. of the Revised Code.

Sec. 4710.41.  (A) If an individual voids an agreement pursuant to section 4710.32 of the Revised Code, 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 division (B)(3) of this section.

(B) Subject to division (C) of this section, an individual with respect to whom a licensee or a person providing debt settlement service without a license violates or fails to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code may recover in a civil action all of the following from the licensee or person that caused the violation or failure:

(1) Compensatory damages for economic injury caused by the violation or failure;

(2) Except as otherwise provided in division (C) of this section and subject to adjustment of the dollar amount pursuant to section 4710.37 of the Revised Code, with respect to a failure to comply with division (D) of section 4710.26, a violation of divisions (A) and (B) of section 4710.34, and a violation of or failure to comply with sections 4710.27, 4710.29, 4710.30, and 4710.31 of the Revised Code, the greater of the amount recovered under division (B)(1) of this section or one thousand dollars;

(3) Reasonable attorney's fees and costs.

(C) In a class action, the minimum damages provided in division (B) of this section do not apply.

(D) In addition to the remedies available under division (B) of this section, if a licensee fails to comply with an individual's right to cancellation under section 4710.30 of the Revised Code, 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) A licensee is not liable under this section for a violation or failure to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code if the licensee proves that the violation or failure was not intentional and resulted from a good-faith error notwithstanding the maintenance of procedures reasonably adapted to avoid the error. If, in connection with a violation or failure, the licensee has received more money than authorized by an agreement or sections 4710.20 to 4710.43 of the Revised Code, the defense provided by division (E) of this section is not available unless the licensee refunds the excess within three business days after learning of the violation or failure.

(F) If a licensee or a person providing debt settlement service without a license violates or fails to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code, an individual may recover under this section or pursuant to section 4710.43 of the Revised Code, but not both for the same act or practice.

Sec. 4710.42.  (A) An action or proceeding brought pursuant to division (A), (B), or (C) of section 4710.38 of the Revised Code must be commenced within four years after the conduct occurs that is the basis of the director's complaint.

(B) An action brought pursuant to section 4710.41 of the Revised Code must be commenced within two years after the latest of the following:

(1) The individual's last transmission of money to the licensee;

(2) The date on which the individual discovered or reasonably should have discovered the facts giving rise to the individual's claim;

(3) Termination of actions or proceedings by the director with respect to a violation or failure to comply with any provision of sections 4710.20 to 4710.43 of the Revised Code.

(C) The period prescribed in division (B)(2) of this section is tolled during any period during which the licensee or, if different, the defendant, has materially and willfully misrepresented information required by sections 4710.20 to 4710.43 of the Revised Code to be disclosed to the individual, if the information so misrepresented is material to the establishment of the liability of the defendant under sections 4710.20 to 4710.43 of the Revised Code.

Sec. 4710.43. Any violation or failure to comply with sections 4710.20 to 4710.43 of the Revised Code by a licensee or a person providing debt settlement service without a license is deemed an unfair or deceptive act or practice in violation of section 1345.02 of the Revised Code. A person injured by such a violation has a cause of action and is entitled to the same relief available to a consumer under section 1345.09 of the Revised Code, and all the powers and remedies available to the attorney general to enforce sections 1345.01 to 1345.13 of the Revised Code are available to the attorney general to enforce sections 4710.20 to 4710.43 of the Revised Code.

Section 2.  That existing section 4710.01 of the Revised Code is hereby repealed.