Note:
MD
COML § 14-1901
Subtitle
19.
Commercial Law
Title
14. Miscellaneous Consumer Protection Provisions
Subtitle
19.
§ 14-1901. Definitions
(a) In this subtitle the following words have the meanings
indicated.
(b) "Commissioner" means the Commissioner of Financial
Regulation of the Department of Labor, Licensing, and Regulation.
(c) "Consumer" means any individual who is solicited to
purchase or who purchases for personal, family, or household purposes the
services of a credit services business.
(d) "Consumer
reporting agency", "consumer report", "investigative
consumer report", and "file" shall have the meaning ascribed to
each under § 14-1201 of
this title.
(e)(1) "Credit services business" means any person who,
with respect to the extension of credit by others, sells, provides, or
performs, or represents that such person can or will sell, provide, or perform,
any of the following services in return for the payment of money or other
valuable consideration:
(i) Improving a consumer's credit record, history, or rating or establishing a new credit file or record;
(ii) Obtaining an extension of
credit for a consumer; or
(iii) Providing advice or
assistance to a consumer with regard to either subparagraph (i) or (ii) of this
paragraph.
(2) "Credit services business" includes a person who
sells or attempts to sell written materials containing information that the
person represents will enable a consumer to establish a new credit file or
record.
(3) "Credit services
business" does not include:
(i) Any person authorized to
make loans or extensions of credit under the laws of this
State or the United States who is actively engaged in the business of making
loans or other extensions of credit to residents of this State;
(ii) Any bank, trust company,
savings bank, or savings and loan association whose deposits or accounts are
eligible for insurance by the Federal Deposit Insurance Corporation or any
credit union organized and chartered under the laws of this State or the
(iii) Any nonprofit
organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code (26 U.S.C. § 501(c)(3));
(iv) Any person licensed as a
real estate broker by this State where the person is acting within the course
and scope of that license;
(v) Any person licensed as a
mortgage lender by this State;
(vi) An individual admitted to
the Bar of the Court of Appeals of Maryland when the individual renders
services within the course and scope of practice by the individual as a lawyer
and does not engage in the credit services business on a regular and continuing
basis;
(vii) Any broker-dealer
registered with the Securities and Exchange Commission or the Commodity Futures
Trading Commission where the broker-dealer is acting within the course and
scope of that regulation;
(viii) Any consumer reporting
agency as defined in the federal Fair Credit Reporting Act (15 U.S.C. §§ 1681 - 1681t) or in § 14-1201(e) of this title; or
(ix) An individual licensed by
the Maryland Board of Public Accountancy when the individual renders services
within the course and scope of practice by the individual as a certified public
accountant and does not engage in the credit services business on a regular and
continuing basis.
(f) "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.
(g) "Person"
includes an individual, corporation, government or governmental subdivision or
agency, business trust, estate, trust, partnership, association, 2 or more
persons having a joint or common interest, and any other legal or commercial
entity.
§ 14-1902. Proscribed
conduct
A credit services business, its employees, and independent
contractors who sell or attempt to sell the services of a credit services
business shall not:
(1) Receive any money or other valuable consideration from the consumer, unless the credit services business has secured from the Commissioner a license under Title 11, Subtitle 3 of the Financial Institutions Article;
(2) Receive any money or other valuable consideration solely for
referral of the consumer to a retail seller or to any other credit grantor who
will or may extend credit to the consumer, if the credit extended to the
consumer is substantially the same terms as those available to the general
public;
(3) Make, or assist or advise
any consumer to make, any statement or other representation that is false or
misleading, or which by the exercise of reasonable care should be known to be
false or misleading, to a consumer reporting agency, government agency, or
person to whom the consumer applies or intends to apply for an extension of credit,
regarding a consumer's creditworthiness, credit standing, credit capacity, or
true identity;
(4) Make
or use any false or misleading representations in the offer or sale of the
services of a credit services business;
(5) Engage, directly or
indirectly, in any act, practice, or course of business which operates as a
fraud or deception on any person in connection with the offer or sale of the
services of a credit services business;
(6) Charge or receive any money
or other valuable consideration prior to full and complete performance of the
services that the credit services business has agreed to perform for or on
behalf of the consumer;
(7) Create, assist a consumer
to create, or provide a consumer with information on how to create, a new
consumer report, credit file, or credit record by obtaining and using a
different name, address, telephone number, Social Security number, or employer
tax identification number; or
(8) Assist a consumer to obtain
an extension of credit at a rate of interest which, except for federal
preemption of State law, would be prohibited under Title 12 of this article.
§ 14-1903. Application;
licensure
(a) Notwithstanding any election of law or designation of situs in
any contract, this subtitle applies to any contract for credit services if:
(1) The credit services business offers or agrees to sell, provide, or perform any services to a resident of this State;
(2) A resident of this State accepts or makes the offer in this
State to purchase the services of the credit services business; or
(3) The credit services business makes any verbal or written
solicitation or communication that originates either inside or outside of this
State but is received in the State by a resident of this State.
(b) A credit services business is required to be licensed under
this subtitle and is subject to the licensing, investigatory, enforcement, and
penalty provisions of this subtitle and Title 11, Subtitle 3 of the Financial
Institutions Article.
(c) A license required by this subtitle shall be issued by the
Commissioner.
(d) A person not included within the definition of a credit
services business as provided in § 14-1901(e)(3) of this subtitle is exempt from licensure requirements under this subtitle.
§ 14-1903.1.
Advertising
A person who advertises a service described in § 14-1901(e)(1) of this subtitle, whether or not a credit services business, shall clearly and
conspicuously state in each advertisement the number of:
(1) The license issued under § 14-1903 of this subtitle; or
(2) If not required to be
licensed, the exemption provided by the Commissioner.
§ 14-1904. Information
statement to be provided
(a) Before either the execution of a contract or agreement between
a consumer and a credit services business or the receipt by the credit services
business of any money or other valuable consideration, the credit services
business shall provide the consumer with a written information statement
containing all of the information required under § 14-1905 of
this subtitle.
(b) The credit services business shall maintain on file for a
period of 2 years from the date of the consumer's acknowledgment a copy of the
information statement signed by the consumer acknowledging receipt of the
information statement.
§ 14-1905. Contents of
statement
(a) The information statement required under § 14-1904 of
this subtitle shall include:
(1) An accurate statement of the consumer's right to review any file on the consumer maintained by any consumer reporting agency, and the right of the consumer to receive a copy of a consumer report containing all information in that file as provided under the federal Fair Credit Reporting Act (15 U.S.C. § 1681g) and under § 14-1206 of this title;
(2) A statement that a copy of the consumer report containing all
information in the consumer's file will be furnished free of charge by the
consumer reporting agency if requested by the consumer within 30 days of
receiving a notice of a denial of credit as provided under the federal Fair
Credit Reporting Act (15 U.S.C. § 1681j) and under § 14-1209 of this title;
(3) A statement that a nominal charge not to exceed $5 may be
imposed on the consumer by the consumer reporting agency for a copy of the
consumer report containing all the information in the consumer's file, if the
consumer has not been denied credit within 30 days from
receipt of the consumer's request;
(4) A complete and accurate statement of the consumer's right to
dispute the completeness or accuracy of any item on the consumer contained in
any file that is maintained by any consumer reporting agency, as provided under
the federal Fair Credit Reporting Act (15 U.S.C. § 1681i) and under § 14-1208 of this title;
(5) A complete and detailed
description of the services to be performed by the credit services business for
or on behalf of the consumer, and the total amount the consumer will have to
pay for the services; and
(6) A statement that accurately
reported information may not be permanently removed from the file of a consumer
reporting agency.
(b) A credit services business required to obtain a license
pursuant to § 14-1902 of
this subtitle shall include in the information statement required under § 14-1904 of this
subtitle:
(1) A statement of the consumer's right to file a complaint pursuant to § 14-1911 of this subtitle;
(2) The address of the Commissioner where such complaints should
be filed; and
(3) A statement that a bond
exists and the consumer's right to proceed against the
bond under the circumstances and in the manner set forth in § 14-1910 of this subtitle.
§ 14-1906. Form of
contract
(a) Every contract between a consumer and a credit services
business for the purchase of the services of the credit services business shall
be in writing, dated, signed by the consumer, and shall include:
(1) A conspicuous statement in size equal to at least 10-point bold type, in immediate proximity to the space reserved for the signature of the consumer as follows:
"You, the buyer, may cancel this contract at any time prior
to midnight of the third business 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 consumer, whether to the credit services business or to some other person;
(3) A complete and detailed description of the services to be
performed and the results to be achieved by the credit
services business for or on behalf of the consumer, including all guarantees
and all promises of full or partial refunds and a list of the adverse information
appearing on the consumer's credit report that the credit services business
expects to have modified and the estimated date by which each modification will
occur; and
(4) The principal business address of the credit services business
and the name and address of its agent in this State authorized to receive
service of process.
(b) The contract shall be accompanied by a form completed in
duplicate, captioned "NOTICE OF CANCELLATION", which shall be
attached to the contract and easily detachable, and which shall contain in at
least 10-point bold type the following statement:
"NOTICE OF CANCELLATION
You may cancel this contract, without any penalty or obligation,
at any time prior to midnight of the third business day after the date the
contract is signed.
If you cancel, any payment made by you under this contract will be
returned within 10 days following receipt by the seller of your cancellation
notice.
To cancel this contract, mail or deliver a signed and dated copy of this
cancellation notice, or any 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) (Buyer's signature)"
(c) A copy of the completed contract and all other documents the
credit services business requires the consumer to sign shall be given by the
credit services business to the consumer at the time they are signed.
§ 14-1907. Violations;
waivers; burden of proof
(a) Any breach by a credit services business of a contract under
this subtitle, or of any obligation arising under it, shall constitute a
violation of this subtitle.
(b) Any contract for services from a credit services business that
does not comply with the applicable provisions of this subtitle shall be void
and unenforceable as contrary to the public policy of this State.
(c)(1) Any waiver by a
consumer of any of the provisions of this subtitle shall be deemed void and
unenforceable by a credit services business as contrary to the public policy of
this State; and
(2) Any attempt by a credit services business to have a consumer waive rights given by this subtitle shall constitute a violation of this subtitle.
(d) In any proceeding involving this subtitle, the burden of
proving an exemption or an exception from a definition is upon the person
claiming it.
§ 14-1908. Surety bond
required
A credit services business is required to obtain a surety bond
pursuant to Title 11, Subtitle 3 of the Financial Institutions Article.
§ 14-1909. Issuance of
surety bond
The surety bond shall be issued by a surety company authorized to
do business in this State.
§ 14-1910. Liability of
surety
(a) Any person claiming against the surety bond for a violation of
this subtitle may maintain an action against the credit services business and
against the surety.
(b) The surety shall be liable only for actual damages and not for
the punitive damages permitted under § 14-1912 of
this subtitle.
(c) The aggregate liability of the surety to all persons damaged
by a credit services business's violation of this subtitle may not exceed the
amount of the surety bond.
§ 14-1911. Complaint
procedures
(a) Any consumer who has reason to believe that this subtitle has
been violated by any credit services business or by any other person may file a
written complaint setting forth the details of the alleged violation with the
Commissioner.
(b) After receiving the complaint, the Commissioner may inspect
the pertinent books, records, letters and contracts of any credit services
business, and of any person who has furnished information to the credit
services business relating to the specific written complaint.
(c) The Commissioner may investigate the complaint and hold a
hearing in accordance with Title 10, Subtitle 2 of the State Government
Article.
(d) The Commissioner may:
(1) Hold a hearing on the complaint at a time and place in this State reasonably convenient to the parties involved;
(2) Subpoena witnesses;
(3) Take depositions of
witnesses residing without the State, in the manner provided for witnesses in
civil actions in courts of record;
(4) Administer oaths;
(5) Issue orders for compliance
with this subtitle; and
(6) Issue cease and desist
orders, after finding a pattern and practice of violation of this subtitle.
(e)(1) The Commissioner shall give to the credit services
business, or the salesperson, agent, representative, or independent contractor
acting on behalf of the credit services business against whom a complaint is
filed, written notice of the complaint and the time and place of any hearing.
(2) The notice shall:
(i) Be in writing; and
(ii) Be sent by certified mail,
to the principal place of business of the credit services
business or the principal place of business or residence address of the
salesperson, agent, representative, or independent contractor acting on behalf
of the credit services business, at least 10 days prior to the date of the
hearing.
(f)(1) If, after the hearing, the Commissioner finds that the
credit services business, or the salesperson, agent, representative, or
independent contractor acting on behalf of the credit services business, has
engaged or is engaging in any act or practice prohibited by this subtitle, the
Commissioner shall order the credit services business or the person or both to
cease and desist from the act or practice and may order that restitution be
paid to an aggrieved consumer.
(2) The order of the Commissioner shall comply with the Administrative Procedure Act. [FN1]
(g)(1) If an appeal is not filed, the order of the Commissioner
becomes final after expiration of the time allowed by the Administrative
Procedure Act for appeals from the Commissioner's orders.
(2) If an appeal is filed, the order of the Commissioner becomes final after a final decision of a court affirming the order or dismissing the appeal.
(h) If a credit services business or any other person fails to
comply with any lawful order of the Commissioner pursuant to this subtitle or
if any witness fails to appear and testify to any matter regarding which he may
be lawfully interrogated, on petition of the Commissioner setting forth the
facts, the circuit court of any county shall:
(1) Compel obedience to the requirements of the subpoena or order;
(2) Compel the production of
contracts, forms, files, and other evidence; and
(3) Order compliance with any
lawful order issued by the Commissioner under the provisions of subsection
(d)(5) or (6) of this section.
(i) If the credit services business or any other person fails,
refuses, or neglects to comply with the order of the court, the court may
punish that person for contempt of court.
(j) The Administrative Procedure Act, including its provisions for
judicial review of a final decision in a contested case,
applies to proceedings before the Commissioner pursuant to this subtitle.
[FN1] State Government § 10-101 et seq.
§ 14-1912. Noncompliance
(a) Any credit services business which willfully fails to comply
with any requirement imposed under this subtitle with respect to any consumer
is liable to that consumer in an amount equal to the sum of:
(1) Any actual damages sustained by the consumer as a result of the failure;
(2) A monetary award equal to 3
times the total amount collected from the consumer, as ordered by the
Commissioner;
(3) Such amount of punitive
damages as the court may allow; and
(4) In the case of any
successful action to enforce any liability under this section, the costs of the
action together with reasonable attorney's fees as determined by the court.
(b) Any credit services business which is negligent in failing to
comply with any requirement imposed under this subtitle with respect to any
consumer is liable to that consumer in an amount equal to the sum of:
(1) Any actual damages sustained by the consumer as a result of the failure; and
(2) In the case of any
successful action to enforce any liability under this section, the cost of the
action together with reasonable attorney's fees as determined by the court.
§ 14-1913. Statute of
limitations
(a) An action to enforce any liability created under this subtitle
shall be brought within 2 years from the date the violation at issue occurred.
(b) Where a defendant has materially and willfully misrepresented
any information required to be disclosed to a consumer by this subtitle and the
information is material to establishing defendant's liability, the action may
be brought at any time within 2 years of the discovery of the
misrepresentation.
§ 14-1914. Consumer
Protection Act
(a) Each sale of the services of a credit services business that
violates any provision of this subtitle is an unfair or deceptive trade
practice under Title 13 of this article.
(b) If the Division of Consumer Protection of the Office of the
Attorney General has reason to believe that any credit services business, or
any salesperson, agent, representative, or independent contractor acting on
behalf of a credit services business, has violated any provision of this
subtitle, the Division may institute a proceeding under Title 13 of this
article.
§ 14-1915. Sanctions
(a) Except as provided in subsection (b) of this section, any
person who violates any provision of this subtitle is guilty of a misdemeanor
and, on conviction, is subject to a fine not exceeding $5,000 or imprisonment
not exceeding 3 years or both, in addition to any civil penalties.
(b) A person may not be imprisoned for violation of any provision
of an order of the Commissioner or of the Attorney General entered pursuant to
this subtitle or Title 13 of this article.
§ 14-1916. Short title
This subtitle may be cited as
the "Maryland Credit Services Businesses Act".
Current through all Chapters of the 2007 Regular Session effective
through June 1, 2007.
END OF DOCUMENT
MD COML § 14-2201
Subtitle 22.
Commercial Law
Title
14. Miscellaneous Consumer Protection Provisions
Subtitle
22.
§ 14-2201. Definitions
(a) In this subtitle the following words have the meanings
indicated.
(b) "Consumer" means an actual or prospective purchaser,
lessee, or recipient of consumer goods, consumer services, or consumer realty.
(c)(1) "Consumer goods", "consumer realty",
and "consumer services" mean, respectively, goods, real property, and
services which are primarily for personal, household, family, or agricultural
purposes.
(2)(i) Subject to subparagraph (ii) of this paragraph, "consumer services" does not include financial services or securities sales.
(ii) "Consumer
services" includes any solicitation offering credit services where:
1. The consumer is required to call a telephone number;
2. The consumer is charged a separate toll fee for the call; and
3. The person making the solicitation receives any portion of the
separate telephone toll fee paid by the consumer.
(d) "Credit services" means providing or offering to
provide any service in return for the payment of money or other consideration,
where the service is held out to provide assistance to a consumer with regard
to:
(1) Improving the consumer's credit history, credit rating, or credit record; or
(2) Obtaining an extension of credit for the consumer.
(e)(1) "Merchant" means a person who, directly or
indirectly, offers or makes available to consumers any consumer goods, consumer
services, or consumer realty.
(2) "Merchant" does not include a person who is exempt under § 13-104 of this article.
(f) "Telephone solicitation" means the attempt by a
merchant to sell or lease consumer goods, services, or realty to a consumer
located in this State that is:
(1) Made entirely by telephone; and
(2) Initiated by the merchant.
§ 14-2202. Application
(a) The provisions of this subtitle do not apply to a transaction:
(1) Made in accordance with prior negotiations in the course of a visit by the consumer to a merchant operating a retail business establishment which has a fixed permanent location and where consumer goods are displayed or offered for sale on a continuing basis;
(2) In which the person making the solicitation or the business
enterprise for which the person is calling:
(i) Has made a previous sale to
the consumer; or
(ii) Has a preexisting business
relationship with the consumer;
(3) Which is covered by the provisions of Subtitle 3 of this
title;
(4) In which:
(i) The consumer may obtain a
full refund for the return of undamaged and unused goods to the seller within 7
days of receipt by the consumer; and
(ii) The seller will process
the refund within 30 days of receipt of the returned merchandise by the
consumer;
(5) In which the consumer purchases goods or services pursuant to
an examination of a television, radio, or print advertisement or a sample,
brochure, catalogue, or other mailing material of the merchant that contains:
(i) The name, address, and
telephone number of the merchant;
(ii) A description of the goods
or services being sold; and
(iii) Any limitations or
restrictions that apply to the offer; or
(6) In which the merchant is a bona fide charitable organization
as defined in § 6-101 of the Business Regulation Article.
(b) Notwithstanding subsection (a) of this section, this subtitle
applies to any solicitation offering credit services where:
(1) The consumer is required to call a telephone number;
(2) The consumer is charged a separate toll fee for the call; and
(3) The person making the solicitation receives any portion of the
separate telephone toll fee paid by the consumer.
§ 14-2203. Requirements
of contract
(a) A contract made pursuant to a telephone solicitation is not
valid and enforceable against a consumer unless made in compliance with this
subtitle.
(b) A contract made pursuant to a telephone solicitation:
(1) Shall be reduced to writing and signed by the consumer;
(2) Shall comply with all other applicable laws and regulations;
(3) Shall match the description of goods or services as that
principally used in the telephone solicitation;
(4) Shall contain the name,
address, and telephone number of the seller, the total price of the contract,
and a detailed description of the goods or services being sold;
(5) Shall contain, in at least
12 point type, immediately preceding the signature, the following statement:
"You are not obligated to pay any money unless you sign this
contract and return it to the seller."; and
(6) May not exclude from its terms any oral or written representations made by the merchant to the consumer in connection with the transaction.
§ 14-2204. Charging
credit accounts
A merchant engaging in a telephone solicitation may not make or
submit any charge to the consumer's credit account until after the merchant
receives from the consumer a copy of the contract which complies with this
subtitle.
§ 14-2205. Remedies
available
In addition to any remedies otherwise available at law, a violation
of this subtitle shall be:
(1) An unfair or deceptive trade practice under Title 13, Subtitle 3 of this article; and
(2) If the violation involves a solicitation offering credit
services, a violation of the Maryland Credit Services Businesses Act. [FN1]
[FN1] Commercial Law, § 14-1901 et seq.
Case Law
I identified no significant cases construing either of these statutes.