646A.250 Legislative findings. The Legislative Assembly finds and declares that:
(1) The ability to obtain and use credit has become of great importance to consumers who have a vital interest in establishing and maintaining their creditworthiness and credit standing. As a result, consumers who have experienced credit problems may seek assistance from credit services organizations which offer to obtain credit or improve the credit standing of consumers.
(2) Certain advertising and business practices of some credit services organizations have worked a financial hardship upon the people of this state, particularly on those who have limited economic means and are inexperienced in credit matters. Credit services organizations have significant impact upon the economy and well-being of this state and its people.
(3) The purposes of ORS 646A.252 to 646A.270 are to provide prospective customers of credit services organizations with the information necessary to make intelligent decisions regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices. ORS 646A.252 to 646A.270 shall be interpreted liberally to achieve these purposes. [Formerly 646.380]
646A.252 Definitions for ORS 646A.252 to 646A.270. As used in ORS 646A.252 to 646A.270:
(1) "Consumer" means any individual who is solicited to purchase or who purchases the services of a credit services organization.
(2)
(a) "Credit services organization" means any person who, with respect to the extension of credit by others, sells, provides, performs, or represents that the organization can or will sell, provide or perform, in return for the payment of money or other valuable consideration, any of the following services:
(A) Improving, saving or preserving a consumer's credit record, history or rating.
(B) Obtaining an extension of credit for a consumer.
(C) Providing advice, assistance, instruction or instructional materials to a consumer with regard to either subparagraph (A) or (B) of this paragraph.
(b) "Credit services organization" does not include:
(A) Any 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 Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act.
(B) Any financial institution, financial holding company or bank holding company as those terms are defined in ORS 706.008 or any subsidiary or affiliate of a financial institution, financial holding company or bank holding company.
(C) A mortgage banker or mortgage broker as defined in ORS 59.840.
(D) Any nonprofit organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code, provided that the organization does not require a fee for its services and does not receive any money or other valuable consideration prior to the rendering of any services by the organization for the consumer.
(E) An individual licensed as a real estate broker or principal real estate broker by this state if the individual is acting within the course and scope of that license.
(F) Any person licensed to practice law in this state if the person renders services within the course and scope of practice as an attorney.
(G) Any broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission if the broker-dealer is acting within the course and scope of that regulation.
(H) Any consumer reporting agency as defined in the Federal Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.
(I) Any licensee licensed under ORS chapter 725.
(3) "Department" means the Department of Consumer and Business Services.
(4) "Director" means the director of the department or the director's designees.
(5) "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. [Formerly 646.382]
646A.254 Prohibited conduct; cancellation of contract by consumer.
(1) A credit services organization, its salespersons, agents, representatives and independent contractors who sell or attempt to sell the services of a credit services organization shall not do any of the following:
(a) Misrepresent directly or indirectly in any advertising, promotional materials, sales presentation or in any other manner:
(A) The nature of the services to be performed.
(B) The time within which the services will be performed.
(C) The ability to improve the consumer's credit report or credit rating.
(D) The amount or the type of credit a consumer can expect to receive as a result of the performance of the services offered.
(E) The qualifications, training or experience of the organization's personnel.
(b) Make, counsel or advise any consumer to make any statement that is untrue or misleading or that should be known by the exercise of reasonable care to be untrue or misleading with respect to a consumer's creditworthiness, credit standing or credit capacity to a credit reporting agency or a person to whom a consumer is applying for an extension of credit.
(c) Charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit services organization has agreed to perform for the consumer.
(d) Charge or receive any money or other valuable consideration solely for referral of the consumer to a credit provider who will or may extend credit that is or will be extended to the consumer on substantially the same terms as those available to customers of the credit provider.
(e) Transact any business as a credit services organization without first having registered with the Department of Consumer and Business Services as required by ORS 646A.256.
(2) A consumer may cancel any contract between the consumer and a credit services organization at any time prior to midnight of the third business day after the date the contract is entered into. The consumer shall be entitled to a full refund of any fees paid. [Formerly 646.384]
646A.256 Registration of credit services organizations; rules; fees.
(1) A credit services organization shall file a registration statement with the Department of Consumer and Business Services before conducting business in this state. The department by rule shall establish a registration system for credit services organizations. The system shall provide for annual renewals of registrations.
(2) Applications for registration or renewal shall be in writing on a form prescribed by the department and shall be accompanied by a fee in an amount to be established by the director by rule.
(3) The registration statement shall contain information that the director requires and that is consistent with ORS 646A.252 to 646A.270, including, but not limited to:
(a) The name and address of the credit services organization.
(b) The name and address of a registered agent authorized to accept service on behalf of the credit services organization.
(c) The name and address of any person who directly or indirectly owns or controls 10 percent or more of the outstanding shares in the credit services organization.
(d) The name and address of the surety company or insured institution issuing a surety bond or irrevocable letter of credit required by ORS 646A.258.
(4) The registration statement shall also contain either:
(a) A full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this state, any other state or the United States relating to the operation of the credit services organization; or
(b) A notarized affidavit stating that there has been no litigation or unresolved complaint filed with a governmental authority of this state, any other state or the United States relating to the operation of the credit services organization.
(5) Except as provided in this subsection, the credit services organization shall update a registration statement not later than the 90th day after the date on which a change in the information required to be listed on the statement occurs. The credit services organization shall update a registration statement not later than 10 days before there is a change in any information required under subsection (3)(a) or (b) of this section.
(6) Each credit services organization registering under this section shall maintain a copy of the registration statement in the organization's files. The credit services organization shall allow a consumer to inspect the registration statement upon request.
(7) If the director receives a registration statement that complies with this section and any rules of the director, the director shall register the credit services organization. [Formerly 646.386]
646A.258 Surety bond or irrevocable letter of credit.
(1) Every applicant for registration as a credit services organization shall file with the director a corporate surety bond or irrevocable letter of credit running to the State of Oregon in the sum of $25,000. The surety bond or irrevocable letter of credit shall be issued by a surety company or an insured institution as defined in ORS 706.008 authorized to do business in this state.
(2) The surety bond or irrevocable letter of credit shall be issued on the condition that the credit services organization comply with all provisions of ORS 646A.252 to 646A.270 and fully perform on all contracts entered into with consumers.
(3) The surety bond or irrevocable letter of credit shall be continuous until canceled and shall remain in full force and unimpaired at all times to comply with this section. The surety or insured institution shall give the director at least 30 days' written notice before it cancels or terminates its liability under the bond or irrevocable letter of credit.
(4) Any person who suffers damage as a result of a violation of any provision of ORS 646.608 and 646A.250 to 646A.270 or any rule adopted by the director pursuant to ORS 646A.252 to 646A.270 shall have a right of action under the bond or against the irrevocable letter of credit. An action on the bond or against the irrevocable letter of credit may be brought by the state or by any consumer by filing a complaint in a court of competent jurisdiction not later than one year after the surety bond or irrevocable letter of credit is canceled or terminated.
(5) The aggregate liability of the surety or issuer of the irrevocable letter of credit shall not exceed the principal sum of the bond or irrevocable letter of credit.
(6) If a credit services organization is in compliance with the surety bond or irrevocable letter of credit provisions of this section, the individual salespersons or agents or subagents of the credit services organization who sell the services of that organization shall not be required to obtain a separate surety bond or irrevocable letter of credit. [Formerly 646.388]
646A.260 Required disclosures.
(1) Before any agreement is entered into, or before any money is paid by a consumer, whichever occurs first, the credit services organization shall provide the consumer with written disclosure of the information described in subsection (2) of this section. The credit services organization shall maintain on file for a period of two years an exact copy of the disclosure statement, personally signed by the consumer, acknowledging receipt of a copy of the disclosure statement.
(2) The disclosure statement referred to in subsection (1) of this section shall include:
(a) A complete and accurate statement of the consumer's rights to review any file on the consumer maintained by any consumer reporting agency, as provided under the Federal Fair Credit Reporting Act, 15 U.S.C. 1681 et seq.
(b) A statement that the consumer may review the consumer's file under paragraph (a) of this subsection at no charge if the request is made to the credit reporting agency within 30 days after receiving notice that credit has been denied.
(c) The approximate price the consumer will be charged by the credit reporting agency to review the consumer's file maintained by the credit reporting agency.
(d) A complete and detailed description of the services to be performed by the credit services organization for the consumer and the total amount the consumer will have to pay, or become obligated to pay, for the services.
(e) A statement detailing the existence and purpose of the surety bond or irrevocable letter of credit as described in ORS 646A.258, and describing the procedure for commencing an action on the bond or irrevocable letter of credit.
(f) The name and address of the surety company or insured institution that issued the bond or irrevocable letter of credit.
(g) A statement that a written, signed agreement is necessary between the parties. [Formerly 646.390]
646A.262 Contents of contract between consumer and credit services organization; rules.
(1) Each contract between a consumer and a credit services organization for the purchase of the services of the credit services organization shall be in writing, in at least 10-point type, signed and dated by the parties, and shall include all of the following:
(a) The terms and conditions of payment, including the total of all payments to be made by the consumer, whether to the credit services organization or to some other person;
(b) A full and detailed description of the services to be performed by the credit services organization for the consumer, including all guarantees and promises of full or partial refunds, and the date by which the services are to be completely performed or the estimated length of time for performing the services;
(c) The address of the principal place of business of the credit services organization and of the organization's registered agent within the state authorized to accept service of process; and
(d) A conspicuous statement in at least 10-point boldfaced type, in immediate proximity to the space reserved for the signature of the consumer, as follows: "You, the consumer, may cancel this contract at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right."
(2) The contract shall be accompanied by a completed form in duplicate, captioned "Notice of Cancellation" and printed in at least 10-point boldfaced type. The form shall be attached to the contract, be easily detachable and provide a detailed and complete description of the consumer's right to cancel the contract. The director, by rule, shall design the form.
(3) The credit services organization shall provide the consumer with a copy of the completed contract with all attachments the consumer is required to sign at the time the agreement is signed. [Formerly 646.392]
646A.264 Unenforceable contract provisions; burden of proof; injunctions.
(1) Any contract that violates any provision of ORS 646A.252 to 646A.270 and any waiver of any provision of ORS 646A.252 to 646A.270 by a consumer shall be void and unenforceable as contrary to public policy. A credit services organization shall not attempt to induce a consumer to waive the application of any provision of ORS 646A.252 to 646A.270.
(2) In any proceeding under ORS 646A.252 to 646A.270, the burden of proving an exemption from a definition is upon the person claiming such an exemption.
(3) Any circuit court of this state has jurisdiction in equity to restrain and enjoin violations of ORS 646.608 and 646A.250 to 646A.270.
(4) This section shall not prohibit the enforcement by any person of any right provided by ORS 646.608 and 646A.250 to 646A.270 or any other applicable law. [Formerly 646.394]
646A.266 Audit of credit services organization; grounds for registration denial, revocation, suspension or refusal to renew; civil penalty; rules. In addition to the authority conferred by ORS 646.608:
(1) Upon the director's own motion or upon receipt of a complaint by a customer of a credit services organization or of a person acting as a credit services organization without registration, the director may audit the organization's customer records. If the director finds any discrepancies in the customer records, the director may audit any other accounts or records kept by the organization for discrepancies. The credit services organization or person acting as a credit services organization without registration shall pay the reasonable cost of any audit under this section, as determined by the director.
(2) The director may refuse to issue or renew or may revoke or suspend any registration under ORS 646A.256 if the Department of Consumer and Business Services determines that:
(a) Any information a credit services organization files with the department is false or untruthful;
(b) A credit services organization has violated ORS 646A.252 to 646A.270;
(c) A credit services organization has violated any of the rules of the department adopted under this section and ORS 646.608; or
(d) A credit services organization has failed to maintain in effect the bond or an irrevocable letter of credit required by ORS 646A.258.
(3) If the director issued an initial order of revocation of a registration before the expiration of the registration, the director may enter a final order of revocation even though the registration has expired.
(4) The department may impose a civil penalty in an amount not to exceed $1,000 per violation for each violation of ORS 646A.252 to 646A.270. The civil penalties shall be imposed as provided in ORS 183.745.
(5) Actions of the director under subsections (1) to (4) of this section are subject to the provisions of ORS chapter 183.
(6) The director may adopt rules necessary for the administration of ORS 646.608 and 646A.250 to 646A.270. [Formerly 646.396]
646A.268 Investigations; cease and desist order. The Director of the Department of Consumer and Business Services may:
(1) Undertake the investigations, including investigations outside this state, that the director considers necessary to determine whether a person has violated, is violating or is about to violate ORS 646A.252 to 646A.270, a rule of the director adopted under ORS 646A.256 or 646A.266 or an order of the director issued to enforce ORS 646A.252 to 646A.270;
(2) Require a person to file a statement in writing, under oath or otherwise, concerning the matter being investigated;
(3) Take evidence from witnesses and compel the attendance of witnesses and the production of books, papers, correspondence, memoranda, agreements or other documents or records that the director considers relevant or material to an investigation or proceeding; and
(4) If the director has reason to believe that a person has violated, is violating or is about to violate ORS 646A.252 to 646A.270, a rule of the director adopted under ORS 646A.256 or 646A.266 or an order of the director issued to enforce ORS 646A.252 to 646A.270, issue an order to cease and desist from the violation. [Formerly 646.397]
646A.270 Cease and desist orders; service; effective date; hearing; judicial review.
(1) The Director of the Department of Consumer and Business Services shall serve an order under ORS 646A.268 on the person named in the order.
(2) An order issued under ORS 646A.268 becomes effective upon service on the person named in the order.
(3) ORS 183.413 to 183.470 apply to an order issued under ORS 646A.268.
(4) Notwithstanding subsection (3) of this section, a person may not obtain a hearing on the order unless the person requests the hearing in writing within 20 days after service of the order.
(5) A person who does not request a contested case hearing may not obtain judicial review of the order.
(6) The director may vacate or modify an order issued under ORS 646A.268. A modified order is effective upon service on the person named in the order. [Formerly 646.398]
