State Codes and Statutes
Statutes > Utah > Title-13 > Chapter-42 > 13-42-12813-42-128. Prohibited acts and practices.
(1) A provider may not, directly or indirectly:
(a) misappropriate or misapply money held in trust;
(b) settle a debt on behalf of an individual for more than 50% of the principal amount ofthe debt owed a creditor, unless the individual assents to the settlement after the creditor hasassented;
(c) take a power of attorney that authorizes it to settle a debt, unless the power ofattorney expressly limits the provider's authority to settle debts for not more than 50% of theprincipal amount of the debt owed a creditor;
(d) exercise or attempt to exercise a power of attorney after an individual has terminatedan agreement;
(e) initiate a transfer from an individual's account at a bank or with another person unlessthe transfer is:
(i) a return of money to the individual; or
(ii) before termination of an agreement, properly authorized by the agreement and thischapter, and for:
(A) payment to one or more creditors pursuant to an agreement; or
(B) payment of a fee;
(f) offer a gift or bonus, premium, reward, or other compensation to an individual forexecuting an agreement;
(g) offer, pay, or give a gift or bonus, premium, reward, or other compensation to aperson for referring a prospective customer, if the person making the referral has a financialinterest in the outcome of debt-management services provided to the customer, unless neither theprovider nor the person making the referral communicates to the prospective customer theidentity of the source of the referral;
(h) receive a bonus, commission, or other benefit for referring an individual to a person;
(i) structure a plan in a manner that would result in a negative amortization of any of anindividual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund orwaive the finance charge upon payment of the principal amount of the debt;
(j) compensate its employees on the basis of a formula that incorporates the number ofindividuals the employee induces to enter into agreements;
(k) settle a debt or lead an individual to believe that a payment to a creditor is insettlement of a debt to the creditor unless, at the time of settlement, the individual:
(i) receives a certification by the creditor that the payment is in full settlement of thedebt; or
(ii) is part of a payment plan, the terms of which are included in the certification, whichupon completion will result in full settlement of the debt;
(l) make a representation that:
(i) the provider will furnish money to pay bills or prevent attachments;
(ii) payment of a certain amount will permit satisfaction of a certain amount or range ofindebtedness; or
(iii) participation in a plan will or may prevent litigation, garnishment, attachment,repossession, foreclosure, eviction, or loss of employment;
(m) misrepresent that it is authorized or competent to furnish legal advice or performlegal services;
(n) represent in its agreements, disclosures required by this chapter, advertisements, orInternet website that it is:
(i) a not-for-profit entity unless it is organized and properly operating as a not-for-profitentity under the law of the state in which it was formed; or
(ii) a tax-exempt entity unless it has received certification of tax-exempt status from theInternal Revenue Service and is properly operating as a not-for-profit entity under the law of thestate in which it was formed;
(o) take a confession of judgment or power of attorney to confess judgment against anindividual;
(p) employ an unfair, unconscionable, or deceptive act or practice, including the knowingomission of any material information; or
(q) make or use any untrue or misleading statement:
(i) to the administrator; or
(ii) in the provision of services subject to this chapter.
(2) If a provider furnishes debt-management services to an individual, the provider maynot, directly or indirectly:
(a) purchase a debt or obligation of the individual;
(b) receive from or on behalf of the individual:
(i) a promissory note or other negotiable instrument other than a check or a demand draft;or
(ii) a post-dated check or demand draft;
(c) lend money or provide credit to the individual, except as a deferral of a settlement feeat no additional expense to the individual;
(d) obtain a mortgage or other security interest from any person in connection with theservices provided to the individual;
(e) except as permitted by federal law, disclose the identity or identifying information ofthe individual or the identity of the individual's creditors, except to:
(i) the administrator, upon proper demand;
(ii) a creditor of the individual, to the extent necessary to secure the cooperation of thecreditor in a plan; or
(iii) the extent necessary to administer the plan;
(f) except as otherwise provided in Subsection 13-42-123(6), provide the individual lessthan the full benefit of a compromise of a debt arranged by the provider;
(g) charge the individual for or provide credit or other insurance, coupons for goods orservices, membership in a club, access to computers or the Internet, or any other matter notdirectly related to debt-management services or educational services concerning personal finance,except to the extent such services are expressly authorized by the administrator; or
(h) furnish legal advice or perform legal services, unless the person furnishing thatadvice to or performing those services for the individual is licensed to practice law.
(3) This chapter does not authorize any person to engage in the practice of law.
(4) A provider may not receive a gift or bonus, premium, reward, or other compensation,directly or indirectly, for advising, arranging, or assisting an individual in connection withobtaining, an extension of credit or other service from a lender or service provider, except foreducational or counseling services required in connection with a government-sponsored program.
(5) Unless a person supplies goods, services, or facilities generally and supplies them to
the provider at a cost no greater than the cost the person generally charges to others, a providermay not purchase goods, services, or facilities from the person if an employee or a person that theprovider should reasonably know is an affiliate of the provider:
(a) owns more than 10% of the person; or
(b) is an employee or affiliate of the person.
Amended by Chapter 229, 2009 General Session
