P.A.1994, NO. 160, IMD. EFF. JUNE 13, 1994
AN ACT to prohibit certain methods, acts, and practices of credit services
organizations; to prescribe remedies and penalties; and to repeal certain acts
and parts of acts.
M.C.L.A. 445.1822
Michigan Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit Services Protection Act (Refs & Annos)
445.1822. Definitions
Sec. 2. As used in this act:
(a) "Buyer" means a person who is solicited to purchase or who purchases the
services of a credit services organization.
(b) "Credit services organization" means, except as otherwise provided in
subdivision (c), a person who, in return for consideration, attempts to sell,
provide, or perform 1 or more of the following:
(i) The improvement of a person's credit record, history, or rating.
(ii) The obtainment of an extension of credit.
(iii) Advice or assistance regarding the improvement or repair of a person's
credit record, history, or rating.
(iv) Advice or assistance regarding the obtainment of an extension of credit.
(v) Advice or assistance regarding foreclosure of a real estate mortgage.
(vi) Serve as an intermediate between a debtor and a creditor on behalf of
the debtor regarding credit that was extended prior to any agreement to have the
credit services organization serve as an intermediate.
(c) Credit services organization does not include any of the following:
(i) A person who is licensed in this state or otherwise authorized to make
loans or extend credit under any state statute while engaged in the regular
course of business under that state statute, other than Act No. 326 of the
Public Acts of 1966, being sections 438.31 to 438.33 of the Michigan Compiled
Laws.
(ii) A federal or state chartered bank, credit union, savings bank, or
savings and loan institution, an entity of the federally chartered farm credit
system, or any solely owned subsidiary thereof.
(iii) A person licensed under the occupational code, Act No. 299 of the
Public Acts of 1980, being sections 339.101 to 339.2721 of the Michigan Compiled
Laws, when engaged in the regular course of business.
(iv) A person licensed to practice law in this state if the person renders
services within the course of that person's practice as an attorney and does not
engage in the business of a credit services organization on a regular and
continuing basis.
(v) A judicial officer or other person acting under court order.
(vi) A consumer reporting agency, as defined in section 603 of the fair
credit reporting act, title VI of the consumer credit protection act, Public Law
90- 321, 15 U.S.C. 1681a, while engaged in the regular course of the credit
reporting business.
(vii) A debt management business licensed under the debt management act, Act
No. 148 of the Public Acts of 1975, being sections 451.411 to 451.437 of the
Michigan Compiled Laws, while engaged in the regular course of business under
the debt management act.
(viii) An investment adviser or broker-dealer registered under the uniform
securities act, Act No. 265 of the Public Acts of 1964, being sections 451.501
to 451.818 of the Michigan Compiled Laws.
(ix) A nonprofit corporation that is exempt from taxation under section
501c(3) of the United States internal revenue code, title 26 U.S.C. 501c(3).
(x) A finance subsidiary of a manufacturing corporation.
(d) "Extension of credit" means the right to defer payment of debt or to
incur debt.
(e) "Person" means an individual, partnership, corporation, association, or
other legal entity.
CREDIT(S)
P.A.1994, No. 160, � 2, Imd. Eff. June 13, 1994.
M.C.L.A. 445.1823
Michigan Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit Services Protection Act (Refs & Annos)
445.1823. Credit services organizations; prohibited activities
Sec. 3. A credit services organization, a salesperson, agent, or
representative of a credit services organization, or an independent contractor
who sells or attempts to sell the services of a credit services organization
shall not do any of the following:
(a) Charge or receive from a buyer who is seeking a loan or extension of
credit any money or other valuable consideration before the closing of the loan
or extension of credit.
(b) Charge a buyer or receive from a buyer of services money or other
valuable consideration before completing performance of all services the credit
services organization has agreed to perform for the buyer.
(c) Charge a buyer or receive from a buyer money or other valuable
consideration solely for referral to a retail seller who will or may extend
credit to the buyer if the credit that is or may be extended to the buyer is
substantially the same as that available to the general public.
(d) Make or use a false or misleading representation in the offer or sale of
the services of a credit services organization.
(e) Engage, directly or indirectly, in a fraudulent or deceptive act,
practice, or course of business in connection with the offer or sale of the
services of a credit services organization including, but not limited to, both
of the following:
(i) Guaranteeing or otherwise stating that the organization is able to delete
an adverse credit history unless the representation clearly discloses, in a
manner equally as conspicuous as the guarantee, that this can be done only if
the credit history is inaccurate or obsolete and is not claimed to be accurate
by the creditor who submitted the information.
(ii) Guaranteeing or otherwise stating that the organization is able to
obtain an extension of credit regardless of the buyer's previous credit problems
or credit history unless the representation clearly discloses, in a manner
equally as conspicuous as the guarantee, the eligibility requirements for
obtaining an extension of credit.
(f) Fail to perform the agreed services within 90 days following the date the
buyer signs the contract for services.
(g) Counsel or advise a buyer to make a statement that is known, or should be
known, to be untrue or misleading to a consumer credit reporting agency, a
person who has extended credit to a buyer, or to a person to whom the buyer is
applying for an extension of credit.
(h) Remove, assist, or advise the buyer to remove adverse information from
the buyer's credit record which is accurate and not obsolete.
(i) Create, assist, or advise the buyer to create a new credit record by
using a different name, address, social security number, or employer
identification number.
(j) Submit a buyer's dispute to a consumer credit reporting agency without
the buyer's knowledge.
(k) Provide a service to a buyer that is not pursuant to a written contract that complies with this section.
M.C.L.A. 445.1824
Michigan Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit Services Protection Act (Refs & Annos)
445.1824. Actions
Sec. 4. (1) Except as provided in subsection (2), the attorney general, a
county prosecutor, or a buyer may bring an action to do 1 or more of the
following:
(a) Enjoin a person who is engaged or is about to engage in a method, act, or
practice that violates this act.
(b) Obtain a declaratory judgment that a method, act, or practice violates
this act.
(c) Recover actual damages consisting of an amount not less than the amount
paid by the buyer to the credit services organization, plus reasonable attorney
fees and court costs. The court may also award the buyer any punitive damages
that it considers proper.
(2) A person shall not bring an action under this act more than 4 years after
the date of execution of the contract for services to which the action relates.
(3) In an action under this act, the burden of proving an exemption under
section 2(c) [FN1] is on the person claiming the exemption.
(4) This act does not limit or prohibit any other legal remedy available to the attorney general, a county prosecutor, or a buyer.
M.C.L.A. 445.1825
Michigan Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit Services Protection Act (Refs & Annos)
445.1825. Violations; penalties; recovery of fees and other charges
Sec. 5. (1) A person who violates this act is guilty of a misdemeanor
punishable by imprisonment for not more than 90 days, or a fine of not more than
$1,000.00, or both. Each transaction in violation of this act constitutes a
separate offense.
(2) A credit services organization that violates this act is barred from recovering any fees or other charges from a buyer.
Case Law
I identified no significant cases construing this statutes.