(1) "Buyer" means an individual who is solicited to purchase or who purchases the services of a credit service organization.
(2) "Consumer reporting agency" has the meaning assigned by § 603(f), Fair Credit Reporting Act (15 U.S.C. § 1681a(f)).
(3) "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.
(4) "Retail seller" means a person engaged in the business of selling goods or furnishing services to a buyer.
68 Del. Laws, c. 180, § 1.;
§ 2402. Credit services organization.
(a) A credit services organization is a person who, with respect to the extension of credit by others and in return for the
payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the
following services:
(1) Improving a buyer's credit record, history or rating;
(2) Obtaining an extension of credit for a buyer; or
(3) Providing advice or assistance to a buyer with regard to paragraph (1) or (2) of this subsection.
(b) The following are exempt from this chapter:
(1) A person authorized to make loans or extensions of credit under the laws of this State or the United States who is subject
to regulation and supervision by this State or the United States, or a lender approved by the United States Secretary of Housing
and Urban Development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. § 1701 et
seq.);
(2) A bank or building/savings and loan association whose deposits or accounts are federally insured, or a subsidiary of such
a bank or savings and loan association;
(3) A credit union doing business in this State;
(4) A person licensed under Chapter 22 of Title 5 or Chapter 24A of this title;
(5) A nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code of 1986 [26 U.S.C. § 501(c)(3)];
(6) A person licensed as a real estate broker or salesperson under Chapter 29 of Title 24 acting within the course and scope
of that license;
(7) A person licensed to practice law in this State acting within the course and scope of the person's practice as an attorney;
(8) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Future Trading Commission acting
within the course and scope of that regulation;
(9) A consumer reporting agency;
(10) Mortgage loan or loan brokers who are not engaged in the other activities of credit services organizations as described
in subsection (a) of this section; and
(11) A person licensed to practice public accounting in this State acting within the course and scope of the person's practice
as an accountant.
68 Del. Laws, c. 180, § 1; 75 Del. Laws, c. 430, § 4.;
§ 2403. Prohibited conduct.
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 may not:
(1) Charge a buyer or receive from a buyer money or other valuable consideration before completing performance of all services
the credit services organization has agreed to perform for the buyer, unless the credit services organization has obtained
in accordance with § 2404 of this title a surety bond in the amount required by § 2404(e) of this title issued by a surety
company authorized to do business in this State or established and maintained a surety account at a federally insured bank
or savings and loan association located in this State in which the amount required by § 2404(e) of this title is held in trust
as required by § 2404(c) of this title;
(2) Charge a buyer or receive from a buyer 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 that is or will be extended to the buyer is substantially
the same as that available to the general public;
(3) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization,
including:
a. Guaranteeing to "erase bad credit" or words to that effect unless the representation clearly discloses that this can be
done only if the credit history is inaccurate or obsolete; and
b. Guaranteeing an extension of credit regardless of the person's previous credit problem or credit history unless the representation
clearly discloses the eligibility requirements for obtaining an extension of credit;
(4) 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;
(5) Make or advise a buyer to make a statement with respect to a buyer's creditworthiness, credit standing or credit capacity
that is false or misleading, or that should be known by the exercise of reasonable care to be false or misleading, to a consumer
reporting agency or to a person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit;
(6) Advertise or cause to be advertised, in any manner whatsoever, the services of a credit services organization without
filing a registration statement with the Secretary of State, unless otherwise provided by this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2404. Bond; surety account.
(a) This section applies to a credit services organization required by § 2403(1) of this title to obtain a surety bond or
establish a surety account.
(b) If a bond is obtained, a copy of it shall be filed with the Secretary of State. If a surety account is established, a
notarized or otherwise official notification of the deposit by the depository institution shall be filed with the Secretary
of State. Such notification shall include, at a minimum, the name of the financial institution, name of the credit services
organization, account number and verification that the account is established in accordance with the terms set forth in subsection
(c) of this section.
(c) The bond or surety account required must be in favor of the State for the benefit of any person who is damaged by any
violation of this chapter. The bond or surety account must also be in favor of any person damaged by such a violation.
(d) Any person claiming against the bond or surety 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 damages
awarded under § 2409(a) of this title and not the punitive damages permitted under that section. The aggregate liability
of the surety or trustee to all persons damaged by a credit services organization's violation of this chapter may not exceed
the amount of the surety account or bond.
(e) The bond or the surety account shall be in the amount of $15,000.
(f) A depository holding money in a surety account under this chapter may not convey money in the account to the credit services
organization that established the account or a representative of the credit services organization unless the credit services
organization or representative presents a statement issued by the Secretary of State indicating that § 2405(f) of this title
has been satisfied in relation to the account. The Secretary of State may conduct investigations and require submission of
information as necessary to enforce this subsection.
68 Del. Laws, c. 180, § 1.;
§ 2405. Registration.
(a) A credit services organization shall file a registration statement with the Secretary of State before conducting business
in this State. The registration statement must contain:
(1) The name and address of the credit services organization; and
(2) The name and address of any person who directly or indirectly owns or controls 10 percent or more of the outstanding shares
of stock in the credit services organization.
(b) The registration statement must also contain either:
(1) A full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this State
relating to the operation of the credit services organization; or
(2) A notarized statement that states that there has been no litigation or unresolved complaint filed with a governmental
authority of this State relating to the operation of the credit services organization.
(3) The name and address of the credit services organization's agent in the State authorized to receive service of process.
(c) The credit services organization shall update the statement not later than the 90th day after the date on which a change
in the information required in the statement occurs.
(d) Each credit services organization registering hereunder shall maintain a copy of the registration statement in the files
of the credit services organization. The credit services organization shall allow a buyer to inspect the registration statement
on request.
(e) The Secretary of State may charge each credit services organization that files a registration statement with the Secretary
of State a reasonable fee not to exceed $100 to cover the cost of filing. The Secretary of State may not require a credit
services organization to provide information other than that provided in the registration statement.
(f) The bond or surety account shall be maintained until 2 years after the date that the credit services organization ceases
operations.
68 Del. Laws, c. 180, § 1.;
§ 2406. Disclosure statement.
(a) Before executing a contract or agreement with a buyer or receiving money or other valuable consideration, a credit services
organization shall provide the buyer with a statement in writing, containing:
(1) A complete and detailed description of the services to be performed by the credit services organization for the buyer
and the total cost of the services;
(2) A statement explaining the buyer's right to proceed against the bond or surety account required by § 2404 of this title;
(3) The name and address of the surety company that issued the bond, or the name and address of the depository and the trustee,
and the account number of the surety account;
(4) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer reporting
agency, as provided by the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.);
(5) A statement that the buyer's file is available for review from the consumer reporting agency at no charge, under certain
circumstances, if requested by the consumer within 30 days of receiving notice of a denial of credit and as provided in the
Federal Fair Credit Reporting Act (15 U.S.C. § 1681j);
(6) A complete and accurate statement of the buyer's right to dispute directly with the consumer reporting agency the completeness
or accuracy of any item contained in a file on the buyer maintained by that consumer reporting agency;
(7) A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency;
(8) A complete and accurate statement of when consumer information becomes obsolete, and of when consumer reporting agencies
are prevented from issuing reports containing obsolete information; and
(9) A complete and accurate statement of the availability of nonprofit credit counseling services.
(b) The credit services organization shall maintain on file, for a period of 2 years after the date the statement is provided,
an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.
68 Del. Laws, c. 180, § 1.;
§ 2407. Form and terms of contract.
(a) Each contract between the buyer and a credit services organization for the purchase of the services of the credit services
organization must be in writing, dated, signed by the buyer, and must include:
(1) A statement in type that is boldfaced, capitalized, underlined or otherwise set out from surrounding written materials
so as to be conspicuous, 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 before midnight of the 3rd day after the date of the transaction. See the attached
notice of cancellation form for an explanation of this right.";
(2) 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 another person;
(3) 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, and the estimated length of time, not to exceed 180 days, for
performing the services; and
(4) The address of the credit services organization's principal place of business and the name and address of its agent in
the State authorized to receive service of process.
(b) The contract must have attached two easily detachable copies of a
notice of cancellation. The notice must be in boldfaced type and in the
following form:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation, within 3 days after the date the contract is signed.
If you cancel, any payment made by you under this contract will be returned within 10 days after the date of receipt by the
seller of your cancellation notice.
To cancel this contract, mail or deliver a signed dated copy of this cancellation notice, or other written notice to:
(name of seller) at (address of seller) (place of business) not later
than midnight (date) I hereby cancel this transaction.
(date)
(purchaser's signature)"
(c) The credit services organization shall give to the buyer a copy of the completed contract and all other documents the
credit services organization requires the buyer to sign at the time they are signed.
(d) The breach by a credit services organization of a contract under this chapter, or of any obligation arising from a contract
under this chapter, is a violation of this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2408. Waiver.
(a) A credit services organization may not attempt to cause a buyer to waive a right under this chapter.
(b) A waiver by a buyer of any part of this chapter is void.
68 Del. Laws, c. 180, § 1.;
§ 2409. Private enforcement.
(a) A buyer injured by a violation of this chapter may bring an action for injunctive relief or recovery of damages, or both.
The damages awarded may not be less than the amount paid by the buyer to the credit services organization and may include
punitive damages.
(b) In a civil action under subsection (a) of this section, the court, in its discretion, may allow reasonable attorney's
fees and court costs to the prevailing buyer.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2410. Enforcement by the Attorney General.
(a) The Attorney General shall have the same authority to enforce and carry out this subchapter as granted by § 2517 of Title
29 and by §§ 2511-2527 and §§ 2531-2536 of this title.
(b) Any violation of § 2403 of this title shall be deemed an unlawful practice in violation of § 2513 of this title.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2411. Statute of limitations.
An action may not be brought under § 2409 or § 2410 of this title after 4 years after the date of the execution of the contract
for services to which the action relates.
68 Del. Laws, c. 180, § 1.;
§ 2412. Criminal penalty.
An offense under this chapter is a class B misdemeanor.
68 Del. Laws, c. 180, § 1.;
§ 2413. Burden of proving exemption.
In an action under this chapter the burden of proving an exemption under § 2402 of this title shall be on the person claiming
the exemption.
68 Del. Laws, c. 180, § 1.;
§ 2414. Remedies cumulative.
The remedies provided by this chapter are in addition to any other remedies provided by law.
(1) "Buyer" means an individual who is solicited to purchase or who purchases the services of a credit service organization.
(2) "Consumer reporting agency" has the meaning assigned by § 603(f), Fair Credit Reporting Act (15 U.S.C. § 1681a(f)).
(3) "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.
(4) "Retail seller" means a person engaged in the business of selling goods or furnishing services to a buyer.
68 Del. Laws, c. 180, § 1.;
§ 2402. Credit services organization.
(a) A credit services organization is a person who, with respect to the extension of credit by others and in return for the
payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the
following services:
(1) Improving a buyer's credit record, history or rating;
(2) Obtaining an extension of credit for a buyer; or
(3) Providing advice or assistance to a buyer with regard to paragraph (1) or (2) of this subsection.
(b) The following are exempt from this chapter:
(1) A person authorized to make loans or extensions of credit under the laws of this State or the United States who is subject
to regulation and supervision by this State or the United States, or a lender approved by the United States Secretary of Housing
and Urban Development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. § 1701 et
seq.);
(2) A bank or building/savings and loan association whose deposits or accounts are federally insured, or a subsidiary of such
a bank or savings and loan association;
(3) A credit union doing business in this State;
(4) A person licensed under Chapter 22 of Title 5 or Chapter 24A of this title;
(5) A nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code of 1986 [26 U.S.C. § 501(c)(3)];
(6) A person licensed as a real estate broker or salesperson under Chapter 29 of Title 24 acting within the course and scope
of that license;
(7) A person licensed to practice law in this State acting within the course and scope of the person's practice as an attorney;
(8) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Future Trading Commission acting
within the course and scope of that regulation;
(9) A consumer reporting agency;
(10) Mortgage loan or loan brokers who are not engaged in the other activities of credit services organizations as described
in subsection (a) of this section; and
(11) A person licensed to practice public accounting in this State acting within the course and scope of the person's practice
as an accountant.
68 Del. Laws, c. 180, § 1; 75 Del. Laws, c. 430, § 4.;
§ 2403. Prohibited conduct.
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 may not:
(1) Charge a buyer or receive from a buyer money or other valuable consideration before completing performance of all services
the credit services organization has agreed to perform for the buyer, unless the credit services organization has obtained
in accordance with § 2404 of this title a surety bond in the amount required by § 2404(e) of this title issued by a surety
company authorized to do business in this State or established and maintained a surety account at a federally insured bank
or savings and loan association located in this State in which the amount required by § 2404(e) of this title is held in trust
as required by § 2404(c) of this title;
(2) Charge a buyer or receive from a buyer 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 that is or will be extended to the buyer is substantially
the same as that available to the general public;
(3) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization,
including:
a. Guaranteeing to "erase bad credit" or words to that effect unless the representation clearly discloses that this can be
done only if the credit history is inaccurate or obsolete; and
b. Guaranteeing an extension of credit regardless of the person's previous credit problem or credit history unless the representation
clearly discloses the eligibility requirements for obtaining an extension of credit;
(4) 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;
(5) Make or advise a buyer to make a statement with respect to a buyer's creditworthiness, credit standing or credit capacity
that is false or misleading, or that should be known by the exercise of reasonable care to be false or misleading, to a consumer
reporting agency or to a person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit;
(6) Advertise or cause to be advertised, in any manner whatsoever, the services of a credit services organization without
filing a registration statement with the Secretary of State, unless otherwise provided by this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2404. Bond; surety account.
(a) This section applies to a credit services organization required by § 2403(1) of this title to obtain a surety bond or
establish a surety account.
(b) If a bond is obtained, a copy of it shall be filed with the Secretary of State. If a surety account is established, a
notarized or otherwise official notification of the deposit by the depository institution shall be filed with the Secretary
of State. Such notification shall include, at a minimum, the name of the financial institution, name of the credit services
organization, account number and verification that the account is established in accordance with the terms set forth in subsection
(c) of this section.
(c) The bond or surety account required must be in favor of the State for the benefit of any person who is damaged by any
violation of this chapter. The bond or surety account must also be in favor of any person damaged by such a violation.
(d) Any person claiming against the bond or surety 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 damages
awarded under § 2409(a) of this title and not the punitive damages permitted under that section. The aggregate liability
of the surety or trustee to all persons damaged by a credit services organization's violation of this chapter may not exceed
the amount of the surety account or bond.
(e) The bond or the surety account shall be in the amount of $15,000.
(f) A depository holding money in a surety account under this chapter may not convey money in the account to the credit services
organization that established the account or a representative of the credit services organization unless the credit services
organization or representative presents a statement issued by the Secretary of State indicating that § 2405(f) of this title
has been satisfied in relation to the account. The Secretary of State may conduct investigations and require submission of
information as necessary to enforce this subsection.
68 Del. Laws, c. 180, § 1.;
§ 2405. Registration.
(a) A credit services organization shall file a registration statement with the Secretary of State before conducting business
in this State. The registration statement must contain:
(1) The name and address of the credit services organization; and
(2) The name and address of any person who directly or indirectly owns or controls 10 percent or more of the outstanding shares
of stock in the credit services organization.
(b) The registration statement must also contain either:
(1) A full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this State
relating to the operation of the credit services organization; or
(2) A notarized statement that states that there has been no litigation or unresolved complaint filed with a governmental
authority of this State relating to the operation of the credit services organization.
(3) The name and address of the credit services organization's agent in the State authorized to receive service of process.
(c) The credit services organization shall update the statement not later than the 90th day after the date on which a change
in the information required in the statement occurs.
(d) Each credit services organization registering hereunder shall maintain a copy of the registration statement in the files
of the credit services organization. The credit services organization shall allow a buyer to inspect the registration statement
on request.
(e) The Secretary of State may charge each credit services organization that files a registration statement with the Secretary
of State a reasonable fee not to exceed $100 to cover the cost of filing. The Secretary of State may not require a credit
services organization to provide information other than that provided in the registration statement.
(f) The bond or surety account shall be maintained until 2 years after the date that the credit services organization ceases
operations.
68 Del. Laws, c. 180, § 1.;
§ 2406. Disclosure statement.
(a) Before executing a contract or agreement with a buyer or receiving money or other valuable consideration, a credit services
organization shall provide the buyer with a statement in writing, containing:
(1) A complete and detailed description of the services to be performed by the credit services organization for the buyer
and the total cost of the services;
(2) A statement explaining the buyer's right to proceed against the bond or surety account required by § 2404 of this title;
(3) The name and address of the surety company that issued the bond, or the name and address of the depository and the trustee,
and the account number of the surety account;
(4) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer reporting
agency, as provided by the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.);
(5) A statement that the buyer's file is available for review from the consumer reporting agency at no charge, under certain
circumstances, if requested by the consumer within 30 days of receiving notice of a denial of credit and as provided in the
Federal Fair Credit Reporting Act (15 U.S.C. § 1681j);
(6) A complete and accurate statement of the buyer's right to dispute directly with the consumer reporting agency the completeness
or accuracy of any item contained in a file on the buyer maintained by that consumer reporting agency;
(7) A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency;
(8) A complete and accurate statement of when consumer information becomes obsolete, and of when consumer reporting agencies
are prevented from issuing reports containing obsolete information; and
(9) A complete and accurate statement of the availability of nonprofit credit counseling services.
(b) The credit services organization shall maintain on file, for a period of 2 years after the date the statement is provided,
an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.
68 Del. Laws, c. 180, § 1.;
§ 2407. Form and terms of contract.
(a) Each contract between the buyer and a credit services organization for the purchase of the services of the credit services
organization must be in writing, dated, signed by the buyer, and must include:
(1) A statement in type that is boldfaced, capitalized, underlined or otherwise set out from surrounding written materials
so as to be conspicuous, 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 before midnight of the 3rd day after the date of the transaction. See the attached
notice of cancellation form for an explanation of this right.";
(2) 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 another person;
(3) 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, and the estimated length of time, not to exceed 180 days, for
performing the services; and
(4) The address of the credit services organization's principal place of business and the name and address of its agent in
the State authorized to receive service of process.
(b) The contract must have attached two easily detachable copies of a
notice of cancellation. The notice must be in boldfaced type and in the
following form:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation, within 3 days after the date the contract is signed.
If you cancel, any payment made by you under this contract will be returned within 10 days after the date of receipt by the
seller of your cancellation notice.
To cancel this contract, mail or deliver a signed dated copy of this cancellation notice, or other written notice to:
(name of seller) at (address of seller) (place of business) not later
than midnight (date) I hereby cancel this transaction.
(date)
(purchaser's signature)"
(c) The credit services organization shall give to the buyer a copy of the completed contract and all other documents the
credit services organization requires the buyer to sign at the time they are signed.
(d) The breach by a credit services organization of a contract under this chapter, or of any obligation arising from a contract
under this chapter, is a violation of this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2408. Waiver.
(a) A credit services organization may not attempt to cause a buyer to waive a right under this chapter.
(b) A waiver by a buyer of any part of this chapter is void.
68 Del. Laws, c. 180, § 1.;
§ 2409. Private enforcement.
(a) A buyer injured by a violation of this chapter may bring an action for injunctive relief or recovery of damages, or both.
The damages awarded may not be less than the amount paid by the buyer to the credit services organization and may include
punitive damages.
(b) In a civil action under subsection (a) of this section, the court, in its discretion, may allow reasonable attorney's
fees and court costs to the prevailing buyer.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2410. Enforcement by the Attorney General.
(a) The Attorney General shall have the same authority to enforce and carry out this subchapter as granted by § 2517 of Title
29 and by §§ 2511-2527 and §§ 2531-2536 of this title.
(b) Any violation of § 2403 of this title shall be deemed an unlawful practice in violation of § 2513 of this title.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2411. Statute of limitations.
An action may not be brought under § 2409 or § 2410 of this title after 4 years after the date of the execution of the contract
for services to which the action relates.
68 Del. Laws, c. 180, § 1.;
§ 2412. Criminal penalty.
An offense under this chapter is a class B misdemeanor.
68 Del. Laws, c. 180, § 1.;
§ 2413. Burden of proving exemption.
In an action under this chapter the burden of proving an exemption under § 2402 of this title shall be on the person claiming
the exemption.
68 Del. Laws, c. 180, § 1.;
§ 2414. Remedies cumulative.
The remedies provided by this chapter are in addition to any other remedies provided by law.
(1) "Buyer" means an individual who is solicited to purchase or who purchases the services of a credit service organization.
(2) "Consumer reporting agency" has the meaning assigned by § 603(f), Fair Credit Reporting Act (15 U.S.C. § 1681a(f)).
(3) "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.
(4) "Retail seller" means a person engaged in the business of selling goods or furnishing services to a buyer.
68 Del. Laws, c. 180, § 1.;
§ 2402. Credit services organization.
(a) A credit services organization is a person who, with respect to the extension of credit by others and in return for the
payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the
following services:
(1) Improving a buyer's credit record, history or rating;
(2) Obtaining an extension of credit for a buyer; or
(3) Providing advice or assistance to a buyer with regard to paragraph (1) or (2) of this subsection.
(b) The following are exempt from this chapter:
(1) A person authorized to make loans or extensions of credit under the laws of this State or the United States who is subject
to regulation and supervision by this State or the United States, or a lender approved by the United States Secretary of Housing
and Urban Development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. § 1701 et
seq.);
(2) A bank or building/savings and loan association whose deposits or accounts are federally insured, or a subsidiary of such
a bank or savings and loan association;
(3) A credit union doing business in this State;
(4) A person licensed under Chapter 22 of Title 5 or Chapter 24A of this title;
(5) A nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code of 1986 [26 U.S.C. § 501(c)(3)];
(6) A person licensed as a real estate broker or salesperson under Chapter 29 of Title 24 acting within the course and scope
of that license;
(7) A person licensed to practice law in this State acting within the course and scope of the person's practice as an attorney;
(8) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Future Trading Commission acting
within the course and scope of that regulation;
(9) A consumer reporting agency;
(10) Mortgage loan or loan brokers who are not engaged in the other activities of credit services organizations as described
in subsection (a) of this section; and
(11) A person licensed to practice public accounting in this State acting within the course and scope of the person's practice
as an accountant.
68 Del. Laws, c. 180, § 1; 75 Del. Laws, c. 430, § 4.;
§ 2403. Prohibited conduct.
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 may not:
(1) Charge a buyer or receive from a buyer money or other valuable consideration before completing performance of all services
the credit services organization has agreed to perform for the buyer, unless the credit services organization has obtained
in accordance with § 2404 of this title a surety bond in the amount required by § 2404(e) of this title issued by a surety
company authorized to do business in this State or established and maintained a surety account at a federally insured bank
or savings and loan association located in this State in which the amount required by § 2404(e) of this title is held in trust
as required by § 2404(c) of this title;
(2) Charge a buyer or receive from a buyer 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 that is or will be extended to the buyer is substantially
the same as that available to the general public;
(3) Make or use a false or misleading representation in the offer or sale of the services of a credit services organization,
including:
a. Guaranteeing to "erase bad credit" or words to that effect unless the representation clearly discloses that this can be
done only if the credit history is inaccurate or obsolete; and
b. Guaranteeing an extension of credit regardless of the person's previous credit problem or credit history unless the representation
clearly discloses the eligibility requirements for obtaining an extension of credit;
(4) 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;
(5) Make or advise a buyer to make a statement with respect to a buyer's creditworthiness, credit standing or credit capacity
that is false or misleading, or that should be known by the exercise of reasonable care to be false or misleading, to a consumer
reporting agency or to a person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit;
(6) Advertise or cause to be advertised, in any manner whatsoever, the services of a credit services organization without
filing a registration statement with the Secretary of State, unless otherwise provided by this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2404. Bond; surety account.
(a) This section applies to a credit services organization required by § 2403(1) of this title to obtain a surety bond or
establish a surety account.
(b) If a bond is obtained, a copy of it shall be filed with the Secretary of State. If a surety account is established, a
notarized or otherwise official notification of the deposit by the depository institution shall be filed with the Secretary
of State. Such notification shall include, at a minimum, the name of the financial institution, name of the credit services
organization, account number and verification that the account is established in accordance with the terms set forth in subsection
(c) of this section.
(c) The bond or surety account required must be in favor of the State for the benefit of any person who is damaged by any
violation of this chapter. The bond or surety account must also be in favor of any person damaged by such a violation.
(d) Any person claiming against the bond or surety 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 damages
awarded under § 2409(a) of this title and not the punitive damages permitted under that section. The aggregate liability
of the surety or trustee to all persons damaged by a credit services organization's violation of this chapter may not exceed
the amount of the surety account or bond.
(e) The bond or the surety account shall be in the amount of $15,000.
(f) A depository holding money in a surety account under this chapter may not convey money in the account to the credit services
organization that established the account or a representative of the credit services organization unless the credit services
organization or representative presents a statement issued by the Secretary of State indicating that § 2405(f) of this title
has been satisfied in relation to the account. The Secretary of State may conduct investigations and require submission of
information as necessary to enforce this subsection.
68 Del. Laws, c. 180, § 1.;
§ 2405. Registration.
(a) A credit services organization shall file a registration statement with the Secretary of State before conducting business
in this State. The registration statement must contain:
(1) The name and address of the credit services organization; and
(2) The name and address of any person who directly or indirectly owns or controls 10 percent or more of the outstanding shares
of stock in the credit services organization.
(b) The registration statement must also contain either:
(1) A full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this State
relating to the operation of the credit services organization; or
(2) A notarized statement that states that there has been no litigation or unresolved complaint filed with a governmental
authority of this State relating to the operation of the credit services organization.
(3) The name and address of the credit services organization's agent in the State authorized to receive service of process.
(c) The credit services organization shall update the statement not later than the 90th day after the date on which a change
in the information required in the statement occurs.
(d) Each credit services organization registering hereunder shall maintain a copy of the registration statement in the files
of the credit services organization. The credit services organization shall allow a buyer to inspect the registration statement
on request.
(e) The Secretary of State may charge each credit services organization that files a registration statement with the Secretary
of State a reasonable fee not to exceed $100 to cover the cost of filing. The Secretary of State may not require a credit
services organization to provide information other than that provided in the registration statement.
(f) The bond or surety account shall be maintained until 2 years after the date that the credit services organization ceases
operations.
68 Del. Laws, c. 180, § 1.;
§ 2406. Disclosure statement.
(a) Before executing a contract or agreement with a buyer or receiving money or other valuable consideration, a credit services
organization shall provide the buyer with a statement in writing, containing:
(1) A complete and detailed description of the services to be performed by the credit services organization for the buyer
and the total cost of the services;
(2) A statement explaining the buyer's right to proceed against the bond or surety account required by § 2404 of this title;
(3) The name and address of the surety company that issued the bond, or the name and address of the depository and the trustee,
and the account number of the surety account;
(4) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer reporting
agency, as provided by the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.);
(5) A statement that the buyer's file is available for review from the consumer reporting agency at no charge, under certain
circumstances, if requested by the consumer within 30 days of receiving notice of a denial of credit and as provided in the
Federal Fair Credit Reporting Act (15 U.S.C. § 1681j);
(6) A complete and accurate statement of the buyer's right to dispute directly with the consumer reporting agency the completeness
or accuracy of any item contained in a file on the buyer maintained by that consumer reporting agency;
(7) A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency;
(8) A complete and accurate statement of when consumer information becomes obsolete, and of when consumer reporting agencies
are prevented from issuing reports containing obsolete information; and
(9) A complete and accurate statement of the availability of nonprofit credit counseling services.
(b) The credit services organization shall maintain on file, for a period of 2 years after the date the statement is provided,
an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.
68 Del. Laws, c. 180, § 1.;
§ 2407. Form and terms of contract.
(a) Each contract between the buyer and a credit services organization for the purchase of the services of the credit services
organization must be in writing, dated, signed by the buyer, and must include:
(1) A statement in type that is boldfaced, capitalized, underlined or otherwise set out from surrounding written materials
so as to be conspicuous, 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 before midnight of the 3rd day after the date of the transaction. See the attached
notice of cancellation form for an explanation of this right.";
(2) 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 another person;
(3) 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, and the estimated length of time, not to exceed 180 days, for
performing the services; and
(4) The address of the credit services organization's principal place of business and the name and address of its agent in
the State authorized to receive service of process.
(b) The contract must have attached two easily detachable copies of a
notice of cancellation. The notice must be in boldfaced type and in the
following form:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation, within 3 days after the date the contract is signed.
If you cancel, any payment made by you under this contract will be returned within 10 days after the date of receipt by the
seller of your cancellation notice.
To cancel this contract, mail or deliver a signed dated copy of this cancellation notice, or other written notice to:
(name of seller) at (address of seller) (place of business) not later
than midnight (date) I hereby cancel this transaction.
(date)
(purchaser's signature)"
(c) The credit services organization shall give to the buyer a copy of the completed contract and all other documents the
credit services organization requires the buyer to sign at the time they are signed.
(d) The breach by a credit services organization of a contract under this chapter, or of any obligation arising from a contract
under this chapter, is a violation of this chapter.
68 Del. Laws, c. 180, § 1.;
§ 2408. Waiver.
(a) A credit services organization may not attempt to cause a buyer to waive a right under this chapter.
(b) A waiver by a buyer of any part of this chapter is void.
68 Del. Laws, c. 180, § 1.;
§ 2409. Private enforcement.
(a) A buyer injured by a violation of this chapter may bring an action for injunctive relief or recovery of damages, or both.
The damages awarded may not be less than the amount paid by the buyer to the credit services organization and may include
punitive damages.
(b) In a civil action under subsection (a) of this section, the court, in its discretion, may allow reasonable attorney's
fees and court costs to the prevailing buyer.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2410. Enforcement by the Attorney General.
(a) The Attorney General shall have the same authority to enforce and carry out this subchapter as granted by § 2517 of Title
29 and by §§ 2511-2527 and §§ 2531-2536 of this title.
(b) Any violation of § 2403 of this title shall be deemed an unlawful practice in violation of § 2513 of this title.
68 Del. Laws, c. 180, § 1; 77 Del. Laws, c. 310, § 1.;
§ 2411. Statute of limitations.
An action may not be brought under § 2409 or § 2410 of this title after 4 years after the date of the execution of the contract
for services to which the action relates.
68 Del. Laws, c. 180, § 1.;
§ 2412. Criminal penalty.
An offense under this chapter is a class B misdemeanor.
68 Del. Laws, c. 180, § 1.;
§ 2413. Burden of proving exemption.
In an action under this chapter the burden of proving an exemption under § 2402 of this title shall be on the person claiming
the exemption.
68 Del. Laws, c. 180, § 1.;
§ 2414. Remedies cumulative.
The remedies provided by this chapter are in addition to any other remedies provided by law.