Utah Code 70C-7-107. Notice of negative credit report required

70C-7-107. Notice of negative credit report required.

(1)

As used in this section:

Terms Used In Utah Code 70C-7-107

Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Credit bureau: An agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies. (Also commonly referred to as consumer-reporting agency or credit-reporting agency.) ^{Source: OCC}
Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. ^{Source: OCC}
Creditor: means :

(i)

a party:

(A)	who regularly extends consumer credit that is subject to a finance charge or is payable by written agreement in more than four installments, not including a down payment; and

(B)	to whom the obligation is initially payable, either on the face of the note or contract, or by agreement when there is no note or contract;

(ii)

an issuer of a credit card that extends either open-end credit or credit that:

(A)	is not subject to a finance charge; and

(B)	is not payable by written agreement in more than four installments; and

(iii)

an issuer of a credit card that extends closed-end credit that:

(A)	is subject to a finance charge; or

(B)

is payable by written agreement in more than four installments. See Utah Code 70C-1-302

Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.

Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.

Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.

Party: means an individual and any other entity legally capable of entering into a binding contract. See Utah Code 70C-1-302

Person: means :Utah Code 68-3-12.5

Writing: includes :Utah Code 68-3-12.5

(a)

“Creditor,” in addition to its definition under Section 70C-1-302, includes an agent of a creditor engaged in administering or collecting the creditor’s accounts.

(b)

“Credit reporting agency” means any credit bureau, consumer reporting agency, association of lending institutions, association of merchants, association of other creditors, any person, firm, partnership, cooperative, or corporation which, for a fee, dues, or on a cooperative nonprofit basis, is organized for the purpose of, or regularly engages in, the gathering or evaluating of consumer credit information or other information about consumers for the purpose of reporting to third parties on the credit rating or creditworthiness of any party.

(c)

(i)

“Negative credit report” means information reflecting on the credit history of a party that, because of the party’s past delinquencies, late or irregular payment history, insolvency, or any form of default, would reasonably be expected to affect adversely the party’s ability to obtain or maintain credit.

(ii)	Negative credit report does not include information or credit histories arising from a nonconsumer transaction or any other credit transaction outside the scope of this title, nor does it include inquiries about a consumer’s record.

(2)

A creditor may submit a negative credit report to a credit reporting agency, only if the creditor notifies the party whose credit record is the subject of the negative report. After providing this notice, a creditor may submit additional information to a credit reporting agency respecting the same transaction or extension of credit that gave rise to the original negative credit report without providing any additional notice.

(3)

(a)

A creditor shall provide the notice described in Subsection (2):

(i)	in writing;

(ii)

by:

(A)	in-person delivery;

(B)	first class mail, postage prepaid, to the party’s last-known address; or

(C)	if the party has consented to receive notices by electronic mail, by electronic mail; and

(iii)

no more than 30 days after the day on which the creditor submits the negative credit report to the credit reporting agency.

(b)	The notice may be part of any notice of default, billing statement, or other correspondence from the creditor to the party.

(c)	The notice is sufficient if it takes substantially the following form: “As required by Utah law, you are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations.”

(d)	The notice may, in the creditor’s discretion, be more specific than the form given in Subsection (3)(c). For example, the notice may provide particular information regarding an account or list the approximate date on which the creditor submitted or intends to submit a negative credit report.

(4)

(a)	A creditor who fails to provide notice as required by this section is liable to the injured party for actual damages. In any cause of action filed to determine the liability of a creditor or damages, the prevailing party in such an action is entitled to court costs and attorney’s fees.

(b)	If a creditor willfully violates this section, the court may award punitive damages in an amount not in excess of two times the amount of the actual damages awarded.

(c)	A creditor is not liable for failure to provide notice if he establishes by a preponderance of the evidence that, at the time of his failure to give notice, he maintained reasonable procedures to comply with this section.

(5)	A creditor is not required to comply with this section in violation of 11 U.S.C. § 362, as amended.

Amended by Chapter 144, 2020 General Session

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