Section 030-350-4 - REQUIREMENTS AND PROCEDURES FOR OPERATION OF CREDIT SERVICES ORGANIZATIONSA. Escrow of Funds. Each credit services organization shall place fee from consumers, other than bona fide 3rd party fees, in an escrow account with a financial institution in this State, separate from any operating accounts of the business, pending completion of services offered. With respect to credit services organizations offering to arrange for or obtain extensions of credit for consumers, or provide advice or assistance therefore, "completion of services offered" means procurement of credit under the terms agreed to by the parties. Each credit services organization shall maintain in its files in this State, for two (2) years after completion of services offered, a written accounting, including written receipts from payees, for all bona fide 3rd-party fees not placed in escrow. The accounting records and receipts shall be made available to the Bureau upon request as part of any examination or investigation.
Bona fide 3rd-party fees may be excluded from escrowing requirements only if the transaction between the credit services organization and the payee is an "arm's length" transaction, in which no cross-ownership or common financial interest exists between the two entities.
B. Requirement for Written Agreement. Each agreement between a consumer and a credit services organization shall be in writing, dated, signed by the consumer and shall include the following: 1. A full and detailed description of the services to be performed for the consumer, including all guarantees and all promises of full or partial refund of fees paid, whether or not services are completed, and the term for which the agreement shall remain in effect before return of the fees for nonperformance can be required by the consumer;2. The terms and conditions of payment, including the total of all payments to be made by the consumer for the service, whether to the credit services organization or to some other person; and3. The following notice: NOTICE TO CONSUMER: Do not sign this agreement before you read it. You are entitled to a copy of this agreement.
Each credit services organization shall maintain in its files in this State, for two (2) years after completion of services offered, a true and complete signed copy of the written agreement. The copy shall be made available to the Bureau upon request as part of any examination or investigation.
C. Requirement for Written Disclosure. Before any agreement is entered into, or before any money is paid by a consumer, which ever occurs first, the credit services organization shall provide the consumer with written disclosure of material consumer protections, including the following:1. The requirement for a written, signed agreement between the parties.2. The requirement that all fees from the consumer, other than bona fide 3rd-party fees, be placed in an escrow account; and3. The existence and purpose of the surety bond on file with the State, and the procedure for instituting an action against the bond. Each credit services organization shall maintain in its files in this State, for two (2) years after completion of services offered, proof of receipt by the consumer of the written disclosure of material consumer protections. This proof of receipt shall be made available to the Bureau upon request as part of any examination or investigation.
D. Advertising. 1. No credit services organization may engage in this State in false or misleading advertising concerning the terms and conditions of any services or assistance offered.2. This section imposes no liability on the owner or personnel of any medium in which an advertisement appears or through which it is disseminated.3. Upon request and submission of proposed advertising by a credit services organization, the administrator may review said advertising for compliance with those standards.E. Model forms. The Administrator may draft model forms for the Written Agreement (subsection B, above) and the Written Disclosure (subsection C, above) to facilitate compliance with the requirements of the statute and this Rule. If such model forms are drafted, any forms used by credit services organizations which are in substantially identical format will comply with those subsections.02-030 C.M.R. ch. 350, § 4