(1) Misappropriate or misapply money held in trust.
Terms Used In Indiana Code 28-1-29-9.5
- Agreement: means an agreement between a debt management company and a debtor for the performance of debt management services. See Indiana Code 28-1-29-1
- Amortization: Paying off a loan by regular installments.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Attorney: includes a counselor or other person authorized to appear and represent a party in an action or special proceeding. See Indiana Code 1-1-4-5
- Contract: A legal written agreement that becomes binding when signed.
- Contract debtor: means a debtor who has entered into a written agreement with a licensee. See Indiana Code 28-1-29-1
- Debt: means an obligation arising out of personal, family, or household use. See Indiana Code 28-1-29-1
- Debtor: means an individual whose principal debts and obligations arise out of personal, family, or household use and not out of business purpose transactions. See Indiana Code 28-1-29-1
- Department: means the members of the department of financial institutions. See Indiana Code 28-1-29-1
- Fee: means the total amount of money charged to a contract debtor by a debt management company for the administration of a debt management plan. See Indiana Code 28-1-29-1
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Judgment: means all final orders, decrees, and determinations in an action and all orders upon which executions may issue. See Indiana Code 1-1-4-5
- Lead generator: means a person that, in the regular course of business:
Indiana Code 28-1-29-1
- Licensee: means any person to whom a license has been issued pursuant to the provisions of this chapter. See Indiana Code 28-1-29-1
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes individuals, sole proprietorships, partnerships, limited liability companies, trusts, joint ventures, corporations, unincorporated organizations, other entities, and their affiliates, however organized. See Indiana Code 28-1-29-1
- Plan: means a written debt repayment program in which a debt management company furnishes debt management services to a contract debtor and that includes a schedule of payments to be made by or on behalf of the contract debtor and used to pay debts owed by the contract debtor. See Indiana Code 28-1-29-1
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- Principal amount of the debt: means the total amount of a debt at the time the contract debtor enters into an agreement. See Indiana Code 28-1-29-1
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(3) Initiate a transfer to or from a contract debtor‘s account at a bank or with another person unless the transfer is:
(A) a return of money to the contract debtor; or
(B) before the termination of an agreement, properly authorized by the agreement and this chapter, and for:
(i) payment to one (1) or more creditors under an agreement; or
(ii) payment of a fee.
(4) Offer a gift or bonus, premium, reward, or other compensation to a debtor for executing an agreement.
(5) Offer, pay, or give:
(A) a gift or bonus;
(B) a premium;
(C) a reward; or
(D) other compensation;
to a lead generator or another person for referring a prospective customer if the person making the referral has a financial interest in the outcome of debt management services provided to the customer.
(6) Receive a bonus, a commission, or other benefit for referring a debtor to a person.
(7) Structure a plan in a manner that would result in a negative amortization of any of a debtor’s debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt.
(8) Compensate the licensee’s employees on the basis of a formula that incorporates the number of debtors the employee induces to enter into agreements. It is not a violation of this subsection for a licensee to use the number of successfully completed debt management plans as a criterion for compensation for the licensee’s employees.
(9) Settle a debt or lead a contract debtor to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the contract debtor receives a certification by the creditor that the payment is in full settlement of the debt.
(10) Make a representation that:
(A) the licensee will furnish money to pay bills or prevent attachments;
(B) payment of a certain amount will permit satisfaction of a certain amount or range of indebtedness; or
(C) participation in a plan will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.
(11) Misrepresent that the licensee is authorized or competent to furnish legal advice or perform legal services.
(12) Represent in the licensee’s agreements, disclosures required by this chapter, advertisements, or Internet web site that the licensee is:
(A) a nonprofit entity unless the licensee is organized and properly operating as a nonprofit entity under the law of the state in which the entity was formed; or
(B) a tax exempt entity unless the entity has received certification of tax exempt status from the Internal Revenue Service and is properly operating as a nonprofit entity under the law of the state in which the entity was formed.
(13) Take a confession of judgment or power of attorney to confess judgment against a contract debtor.
(14) Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.
(b) If a licensee furnishes debt management services to a debtor, the licensee may not, directly or indirectly, do any of the following:
(1) Purchase a debt or obligation of the debtor.
(2) Receive from or on behalf of the debtor:
(A) a promissory note or other negotiable instrument other than a check or a demand draft; or
(B) a postdated check or demand draft.
(3) Lend money or provide credit to the debtor.
(4) Obtain a mortgage or other security interest from any person in connection with the services provided to the debtor.
(5) Except as permitted by federal law, disclose the identity or identifying information of the debtor or the identity of the debtor’s creditors, except:
(A) to the department, upon proper demand;
(B) to a creditor of the debtor, to the extent necessary to secure the cooperation of the creditor in a plan; or
(C) to the extent necessary to administer the plan.
(6) Charge the debtor for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the Internet, or any other matter not directly related to debt management services or educational services concerning personal finance.
(7) Furnish legal advice or perform legal services unless the person furnishing the advice or performing the services is licensed to practice law.
(c) This chapter does not authorize any person to engage in the practice of law.
(d) A licensee may not receive a gift, bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting a debtor in connection with obtaining an extension of credit or other service from a lender or service provider.
As added by P.L.35-2010, SEC.132. Amended by P.L.216-2013, SEC.31; P.L.69-2018, SEC.49.