State Regulation:
New Hampshire
NH ST T. XXXI, Ch. 359-D
Chapter 359-D. Credit Services Organizations
Title XXXI. Trade and Commerce (Refs & Annos)
Chapter 359-D. Credit Services Organizations (Refs & Annos)
359-D:1 Short Title.
This chapter may be cited as the "credit services regulation
act".
359-D:2 Definitions.
In this chapter:
I. "Buyer" means any natural person who is solicited to
purchase or who purchases the services of a credit services
organization.
II. (a) "Credit services organization" means any person,
who, with respect to the extension of consumer credit by
others, sells, provides, or performs, or represents that he
can or will sell, provide, or perform, in return for the
payment of money or other valuable consideration, a service
for the express or implied purpose of:
(1) Improving a buyer's credit record, credit history, or
credit rating.
(2) Obtaining an extension of consumer credit for a buyer.
(3) Providing advice or assistance to a buyer with regard to
the buyer's credit record, credit history, or credit
rating.
(b) "Credit services organization" does not include:
(1) A depository institution whose deposits are insured by
the Federal Deposit Insurance Corporation, the Federal
Savings and Loan Insurance Corporation, or the National
Credit Union Administration Board, or a depository
institution chartered by this state.
(2) Any nonprofit organization exempt from taxation under
section 501(c)(3) of the Internal Revenue Code.
(3) A real estate broker licensed by this state and acting
within the course and scope of his license.
(4) An attorney licensed by this state or another state
rendering services within the course and scope of that
license.
(5) Any broker-dealer registered with the Securities and
Exchange Commission or the Commodity Futures Trading
Commission acting within the course and scope of the
regulations of these commissions.
(6) Any consumer reporting agency, as defined in RSA
359-B:3, VI, acting within the course and scope of that
chapter.
(7) Any person authorized to make loans or extensions of
credit under the laws of this state or the United States .
III. "Extension of credit" means the right to defer payment
of debt or to incur debt and defer its payment, offered or
granted primarily for personal, family, or household
purposes.
IV. "Person" means any individual, partnership, corporation,
trust, estate, cooperative, association, or other entity.
359-D:3 Prohibited Practices.
A credit services organization, its salespersons, agents,
and representatives, shall not:
I. Charge or receive any money or other valuable
consideration prior to the full and complete performance of
the services which the credit services organization has
agreed to perform for the buyer, unless the credit services
organization has, in conformity to RSA 359-D:8, either
obtained a surety bond issued by a surety company admitted
to do business in this state or established a trust account
at a federally insured bank or savings and loan association
located in this state. If a credit services organization is
in compliance, the salespersons, agents, and representatives
who sell the services of such organization shall not be
required to obtain the surety bond or establish the trust
account provided for by this chapter.
II. Charge or receive any money or other valuable
consideration solely for referral of the buyer to a retail
seller who will or may extend credit to the buyer, if the
credit which is or will be extended to the buyer is upon
substantially the same terms as those available to the
general public.
III. Make, or counsel or advise any buyer to make, any
statement which is untrue or misleading and which is known,
or which by the exercise or 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 credit worthiness, credit
standing, or credit capacity.
IV. 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 any act,
practice, or course of business which operates or would
operate as a fraud or deception upon any person in
connection with the offer or sale of the services of a
credit services organization.
359-D:4 Information Statement Required.
Prior to the execution of a contract or agreement between
the buyer and a credit services organization or prior to the
receipt by the credit services organization of any money or
other valuable consideration, whichever occurs first, the
credit services organization shall provide the buyer a
statement in writing, containing all the information
required by RSA 359-D:5. The credit services organization
shall maintain on file or microfilm for a period of 2 years
an exact copy of the statement, personally signed by the
buyer, acknowledging receipt of a copy of the statement.
359-D:5 Contents of Information Statement.
The information statement shall include all of the
following:
I. A complete and accurate statement of the buyer's right to
review any file on the buyer maintained by any consumer
credit reporting agency, and the right of the buyer to
receive a copy of that file. The statement shall include the
statement that a copy of the buyer's file will be furnished
free of charge by the consumer credit reporting agency if
requested within 30 days of the buyer receiving notice of a
denial of credit, and the approximate price the buyer will
be charged by the credit reporting agency for a copy of the
file.
II. 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 RSA 359-
D:6.
III. 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 will have
to pay, or become obligated to pay, for the services.
IV. If the credit services organization is required to
obtain a surety bond or establish a trust account according
to RSA 359-D:3, I, the statement shall set forth both of the
following:
(a) The buyer's right to proceed against the bond or trust
account under the circumstances and in the manner set forth
in RSA 359-D:8.
(b) The name and address of the surety company which issued
the bond, or the name and address of the depository and the
trustee and the account number of the trust account.
359-D:6 Requirements for Contracts.
I. Every contract between the buyer and a credit services
organization for the purchase of the services of the credit
services organization shall be in writing, dated, and signed
by the buyer, and shall include all of the following:
(a) A conspicuous statement in size equal to at least 10
point bold 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 prior to
midnight of the fifth day after the date of the transaction.
See the attached notice of cancellation form for an
explanation of this right."
(b) The terms and conditions of payment, including the total
of all payments to be made by the buyer, whether to the
credit services organization or to some other person.
(c) A full and detailed description of the services to be
performed by the credit services organization for the buyer,
including all guarantees and all promises of full or partial
refunds, the estimated date by which such services are to be
performed, or estimated length of time for performing such
services.
(d) The credit services organization's principal business
address and the name and address of its agent, other than
the secretary of state, in this state, authorized to receive
service of process.
II. The contract shall be accompanied by a completed form in
duplicate, captioned "Notice of Cancellation," which shall
be attached to the contract and easily detachable, and which
shall contain in type of at least 10 point 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 5 days from the date the contract is
signed.
"If you cancel, any payment made by you under this contract
will be returned within 5 days following receipt by the
seller 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
________________ at
___________________________________________ not later than
(name of seller) (address of seller) (place of
business)
midnight __________.
(date)
"I hereby cancel this transaction."
__________
___________________________________
(date)
(purchaser's signature)
III. 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.
359-D:7 Breach of Contract.
The seller's breach of a contract under this chapter or of
any obligation arising therefrom shall constitute a
violation of this chapter.
359-D:8 Requirements for Surety Bonds.
If a credit services organization is required to obtain a
surety bond or establish a trust account according to RSA
359-D:3, the following procedures shall be applicable:
I. If a bond is obtained, a copy of it shall be filed with
the office of the secretary of state. If a trust account is
maintained, notification of the depository, the trustee, and
the account number shall be filed with the office of the
secretary of state.
II. The bond or trust account required shall be in favor of
the state for the benefit of any person who is damaged by
any violation of this chapter. The bond or trust account
shall also be in favor of any person damaged by such
practices.
III. Any person claiming against the bond or trust account
for a violation of this chapter may maintain an action at
law against the credit services organization and against the
surety or trustee. The surety or trustee shall be liable
only for actual damages and not the punitive damages
permitted under RSA 359-D:11. The aggregate liability of the
surety or trustee to all persons damaged by a credit
services organization's violation of this chapter shall in
no event exceed the amount of the trust account or bond.
IV. The bond or the trust account shall be in an amount
equal to 5 percent of the total amount of the fees charged
buyers by the credit services organization under the
contracts entered into between the credit services
organization and such buyers during the previous 12 months,
but in no case shall the bond be less than $5,000 or more
than $25,000. The amount required shall be adjusted once a
year, no later than the tenth day of the first month of the
credit services organization's fiscal year.
359-D:9 Claiming Waiver of Rights or Exemption.
I. Any waiver by a buyer of the provisions of this chapter
shall be deemed contrary to public policy and shall be void
and unenforceable. Any attempt by a credit services
organization to have a buyer waive rights given by this
chapter shall constitute a violation of this chapter.
II. In any proceeding involving this chapter, the burden of
proving an exemption or an exception from a definition is
upon the person claiming it.
359-D:10 Penalties.
I. Any person who violates any provision of this chapter is
guilty of a misdemeanor. The superior court shall have
jurisdiction in equity to restrain and enjoin the violation
of any provision of this chapter.
II. The duty to institute actions for violation of this
chapter, including equity proceedings to restrain and enjoin
such a violation, is hereby vested in the consumer
protection and antitrust bureau of the department of
justice. The attorney general may prosecute misdemeanor
actions or institute equity proceedings, or both.
III. This section shall not be deemed to prohibit the
enforcement by any person of any right provided by this or
any other law.
IV. The misdemeanor provision of this section does not apply
to a seller's breach of a contract subject to this chapter.
359-D:11 Damages.
Any buyer injured by a violation of this chapter or by the
credit services organization's breach of a contract subject
to this chapter may bring any action for recovery of
damages. Judgment shall be entered for actual damages, but
in no case less than the amount paid by the buyer to the
credit services organization, plus reasonable attorney's
fees and costs. An award, if the trial court deems it
proper, may be entered for punitive damages
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