A debt management services provider cannot prepare an agreement until required compliance steps are done, and the agreement must include specified consumer, fee, creditor, and disclosure information.
Sec. 394.209. WRITTEN DEBT MANAGEMENT SERVICES AGREEMENT. (a) A debt management services provider may not prepare a debt management services agreement before the provider has fully complied with Sections 394.208(a) and (b). (b) Each debt management services agreement must: (1) be dated and signed by the consumer; (2) include the name and address of the consumer and the name, address, and telephone number of the provider; (3) describe the services to be provided; (4) state all fees, individually itemized, to be paid by the consumer; (5) if the proposed debt management plan does not provide for a reduction of principal as a concession, list in the agreement or accompanying document, to the extent the information is available to the provider at the time the agreement is executed, each participating creditor of the consumer to which payments will be made and, based on information provided by the consumer, the amount owed to each creditor and the schedule of payments the consumer will be required to make to the creditor, including the amount and date on which each payment will be due; (6) state the existence of a surety bond or insurance for consumer claims; (7) state that establishment of a debt management plan may impact the consumer's credit rating and credit score either favorably or unfavorably, depending on creditor policies and the consumer's payment history before and during participation in the debt management plan; and (8) state that either party may cancel the agreement without penalty at any time on 10 days' notice and that a consumer who cancels an agreement is entitled to a refund of all money that the consumer has paid to the provider that has not been disbursed. (c) A debt management services agreement may contain a voluntary consumer arbitration provision or a voluntary mediation provision. (d) A provider may deliver the debt management services agreement through the Internet if the provider: (1) has complied with the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. Section 7001 et seq.); (2) sends the consumer a paper copy of the agreement not later than the seventh day after the date of a request by a consumer to do so; and (3) discloses on a prominent page of its Internet website: (A) the provider's name and each name under which it does business; (B) the provider's principal business address and telephone number; and (C) the names of the provider's principal officers. (e) If the provider discusses its services or negotiates with a consumer primarily in a language other than English, the provider may not begin performance of a debt management plan until the provider and consumer sign a copy of the written agreement, provided by the debt management services provider, in that language and a copy is made available to the consumer. Added by Acts 2005, 79th Leg., Ch. 336 (S.B. 1112), Sec. 1, eff. September 1, 2005. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 368 (S.B. 141), Sec. 5, eff. September 1, 2011.