(a) A debt settlement provider shall not engage in false, deceptive, or misleading acts or practices when providing debt settlement services. Without limiting the general application of the foregoing, an act or practice is false, deceptive, or misleading, in connection with providing debt settlement services, if the act or practice consists of any of the following: (1) Making or permitting another entity to publicly make on behalf of the debt settlement provider, a statement or representation that is false, deceptive, or misleading. (2) Posting directly, or indirectly causing to be posted, an online review or ranking on an internet website if the debt settlement provider, or its agent, provided anything of value in exchange for favorable treatment in that review or ranking. (3) Omitting any material information. (b) A debt settlement provider shall provide to the consumer the following disclosures along with an unsigned copy of the written contract proposed to be entered into between the debt settlement provider and the consumer no less than three calendar days prior to the execution of that contract by the consumer. A fully executed copy of the contract shall be delivered to the consumer by the debt settlement provider immediately after the debt settlement provider receives the contract. (1) The contract shall be preceded by a disclosure that contains all of the following information in conspicuous boldface type that is larger than the typeface provided in the contract typeface: (A) There is no guarantee that any particular debt or all of the consumerâs enrolled debts will be reduced, eliminated, or otherwise settled. (B) The deposits made pursuant to the contract will not be distributed to the creditor until a settlement is obtained. This may take months to achieve. (C) If the consumer stops paying any creditor, any of the following may occur: (i) The creditors may still try to collect. (ii) The creditors may sue. (iii) If a creditor obtains a judgment against the consumer, the creditor may garnish the consumerâs wages or levy the consumerâs bank account or accounts, or both garnish the consumerâs wages and levy the consumerâs bank account or accounts. (iv) The consumerâs credit score or credit rating may be negatively impacted. (D) Failing to pay debts on time may adversely affect the consumerâs credit rating or credit scores. (E) Specific results cannot be predicted or guaranteed, and the debt settlement provider cannot require a creditor to negotiate or settle a debt. (F) A consumer may cancel the debt settlement contract at any time without any penalty. (G) Debt settlement services may not be suitable for all individuals. (H) Bankruptcy may provide an alternative to debt settlement. (I) Canceled debt may be counted as income under federal tax law, and the consumer may have to pay income taxes on the amount of forgiven or reduced debt. (J) Many sources of income may be protected from debt collection. Common sources of protected income include disability insurance benefits, life insurance benefits, military benefits, pension plans, retirement benefits, public assistance, social security benefits, supplemental security income (SSI), unemployment benefits, veterans benefits, workers compensation, and student aid. See form EJ-155 from the Judicial Council for a complete list. (K) The number of months estimated to enter into settlement agreements that completely resolve all enrolled debts. (L) All conditions that the consumer must satisfy before the debt settlement provider will make a settlement offer to a creditor. (M) Whether the debt settlement provider pays or receives referral fees. (2) Each contract between a consumer and debt settlement provider: (A) Shall list each debt to be serviced, including, for each debt, the name of the creditor and the total amount of the debt. The total amount of the debt may be based on either a billing statement for the debt or information in the consumerâs consumer report,
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