Florida Enacts Provisions Regarding Consumer Collection Practices
by: Lee Greenberg
The state of Florida recently enacted provisions regarding consumer collection practices in House Bill 413. The legislation becomes effective on October 1, 2014.
Under the new law, a person may not engage in business in Florida as a consumer collection agency without first registering in accordance with the law, and thereafter maintaining a valid registration. Further, the Financial Services Commission may adopt rules requiring electronic submission of forms, documents and required fees as well as establish time periods during which a consumer collection agency is barred from registration due to prior criminal convictions of, or guilty or no contest pleas by, an applicant’s control persons, regardless of adjudication.
In addition, the law requires the Commission to adopt rules which provide the following:
- A 15-year disqualifying period for felonies involving fraud, dishonesty, breach of trust, money laundering, or other acts of moral turpitude, a 7-year disqualifying period for all other felonies, a 5-year disqualifying period for misdemeanors involving fraud, dishonesty, or other acts of moral turpitude;
- An additional waiting period due to dates of imprisonment or community supervision, the commitment of multiple crimes, and other factors reasonably related to the applicant’s criminal history; and
- Mitigating factors for certain crimes.
The law states that the Office of Financial Regulation may, without advance notice, conduct examinations and investigations, within or outside the state of Florida, to determine whether a person has violated the law. In addition, the Office may examine the books, accounts, records, and other documents or matters of any person subject to the law. The Office may compel the production of all relevant books, records, and other documents and materials relative to an examination or investigation. Examinations may not be made more often than once during a 48-month period unless the office has reason to believe a person has violated or will violate the law.
In order to apply for a consumer collection agency registration, an applicant must:
- Submit a completed application form as prescribed by rule of the Commission;
- Submit a nonrefundable application fee of $200. Application fees may not be prorated for partial years or registration; and
- Submit fingerprints for each of the applicant’s control persons.
In order to renew a consumer collection agency registration, a registrant must submit a nonrefundable renewal fee equal to the registration fee and a nonrefundable fee to cover the costs of further fingerprint processing and retention.
The following acts constitute grounds for which disciplinary actions can be taken against a person registered or required to be registered under the law:
- Failure to disburse funds in accordance with agreements;
- Fraud, misrepresentation, deceit, negligence, or incompetence in a collection transaction;
- Commission of fraud, misrepresentation, concealment, or dishonest dealing by trick, scheme, or device, culpable negligence, breach of trust in a business transaction in any state, nation, or territory, or siding, assisting, or conspiring with another person engaged in such misconduct and in furtherance thereof;
- Being convicted of, or entering a plea of guilty or no contest to, regardless of adjudication, a felony or crime involving fraud, dishonesty, breach of trust, money laundering, or act of moral turpitude;
- Having a final judgment entered against the registrant in a civil action upon grounds of fraud, embezzlement, misrepresentation, or deceit;
- Being the subject of a decision or administrative order by a court, or by a state or federal agency, involving a violation of federal or state law relating to debt collection or a rule or regulation adopted under such law;
- Having a license or registration to practice a profession or occupation denied, suspended, or revoked;
- Acting as a consumer collection agency without current registration;
- A material misstatement or omission of fact on an initial or amended registration application;
- Payment for a registration or permit with a check or electronic transmission of funds, which is dishonored by the applicant’s or registrant’s financial institution;
- Failure to comply with, or violation of, any provision of the law;
- Failure to maintain, preserve, and keep available for examination all books, accounts, or other documents required by the law;
- Refusal to permit an investigation or examination of books and records, or refusal to comply with an office subpoena; and
- Failure to timely pay a fee, charge, or fine imposed or assessed pursuant to the law.
If the Office finds a person in violation of the law it may enter an order imposing one or more of the following:
- Issuance of a reprimand;
- Suspension of a registration, subject to reinstatement upon satisfying all reasonable conditions imposed by the Office;
- Revocation of a registration;
- Denial of a registration;
- Imposition of a fine of up to $10,000 for each count or separate offense; and/or
- An administrative fine of up to $1,000 per day for each day that a person engages as a consumer collection agency without a valid registration issued under the law.
About the Author:
Lee Greenberg, J.D. is Vice President and Regulatory Compliance Director at Bankers Advisory. Lee is a graduate of the University of Colorado at Boulder and earned his J.D. at the New England School of Law. He is admitted to the bar in Massachusetts. He can be reached at lee@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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