A provider cannot enroll a consumer in a debt management plan unless it meets several counseling, analysis, disclosure, and verification steps. The provider also must use the consumer’s language for the agreement if services were discussed mainly in another language, must cancel after notice within 10 days, must send reports on a schedule, and must keep a staffed phone system.
Sec. 394.208. REQUIRED ACTIONS BY PROVIDER. (a) A provider may not enroll a consumer in a debt management plan unless, through the services of a counselor certified by an independent accreditation organization, the provider: (1) has provided the consumer individualized counseling and educational information that at a minimum addresses the topics of managing household finances, managing credit and debt, and budgeting; (2) has prepared an individualized financial analysis and an initial debt management plan for the consumer's debts with specific recommendations regarding actions the consumer should take; (3) has determined that the consumer has a reasonable ability to make payments under the proposed debt management plan based on the information provided by the consumer; (4) if the proposed debt management plan does not provide for a reduction of principal as a concession: (A) has a reasonable expectation, provided that the consumer has provided accurate information to the provider, that each creditor of the consumer listed as a participating creditor in the plan will accept payment of the consumer's debts as provided in the initial plan; and (B) has prepared, for all creditors identified by the consumer or identified through additional investigation by the provider, a list, which must be provided to the consumer in a form the consumer may keep, of the creditors that the provider reasonably expects to participate in the plan; and (5) has provided a written document to the consumer in a form the consumer may keep that clearly and conspicuously contains the following statements: (A) that debt management services are not suitable for all consumers and that consumers may request information about other ways, including bankruptcy, to deal with indebtedness; (B) that if the provider is a nonprofit or tax-exempt organization the provider cannot require donations or contributions; and (C) if applicable, that some of the provider's funding comes from contributions from creditors who participate in debt management plans, except that a provider may substitute for "some" the actual percentage of creditor contributions it received during the most recent reporting period. (b) If the provider discusses its services with a consumer primarily in a language other than English, the provider must provide the debt management agreement in that language. (c) A consumer must give at least 10 days' notice to the provider to cancel a debt management services agreement. The provider must cancel a debt management services agreement within 10 days after the date the provider receives the notice from the consumer. The provider must continue making disbursements to the consumer's creditors if money has been paid to the provider under the agreement until the expiration of the 10-day period, unless otherwise agreed in writing by the consumer and the provider. (d) A provider may provide the information required by Subsections (a)(2), (4)(B), and (5) through its Internet website 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) informs the consumer that, on electronic, telephonic, or written request the provider will make available to the consumer a paper copy or copies; and (3) discloses on 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) A provider, including a provider that does business only or principally through the Internet, shall maintain a telephone system staffed at a level that reasonably permits a consumer to access a counselor during ordinary business hours. (f) A provider who receives and disburses money to creditors on behalf of consumers for debt management services shall provide each consumer to whom those services were provided a written report accounting for: (1) the amount of money received from the consumer since the last report; (2) the amount and date of each disbursement made on the consumer's behalf to each creditor listed in the agreement since the last report; (3) any amount deducted from amounts received from the consumer; and (4) any amount held in reserve. (g) The provider shall provide the report under Subsection (f): (1) at least once each calendar quarter; and (2) not later than the 10th business day after the date of a request by a consumer. Added by Acts 2005, 79th Leg., Ch. 336 (S.B. 1112), Sec. 1, eff. September 1, 2005. Amended by: Acts 2007, 80th Leg., R.S., Ch. 48 (S.B. 884), Sec. 3, eff. September 1, 2007. Acts 2011, 82nd Leg., R.S., Ch. 368 (S.B. 141), Sec. 4, eff. September 1, 2011.