Texas Finance Code 394.212 – Prohibited Acts and Practices
(a) A provider may not:
(1) purchase a debt or obligation of a consumer;
(2) receive or charge a fee in the form of a promissory note or other negotiable instrument other than a check or a draft;
(3) lend money or provide credit to the consumer;
(4) obtain a mortgage or other security interest in property owned by a consumer;
(5) engage in business with a for-profit business entity described by § 394.204(c)(7) without prior consent of the commissioner, except that unless denied, consent is considered granted 30 days after the date the provider notifies the commissioner of the intent to engage in business with a for-profit business entity described by § 394.204(c)(7);
(6) offer, pay, or give a gift, bonus, premium, reward, or other compensation to a person for entering into a debt management services agreement;
(7) represent that the provider is authorized or competent to furnish legal advice or perform legal services unless supervised by an attorney as required by State Bar of Texas rules;
(8) use an unconscionable means to obtain a contract with a consumer;
(9) engage in an unfair, deceptive, or unconscionable act or practice in connection with a service provided to a consumer; or
(10) require or attempt to require payment of an amount that the provider states, discloses, or advertises to be a voluntary contribution from the consumer.
(b) A provider does not have a claim:
(1) for breach of contract against a consumer who cancels an agreement pursuant to this subchapter; or
(2) in restitution with respect to an agreement that is void under this subchapter.
Terms Used In Texas Finance Code 394.212
- Contract: A legal written agreement that becomes binding when signed.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- 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 corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
(c) A provider may not include any of the following provisions in a disclosure related to debt management services or in a debt management services agreement:
(1) a confession of judgment clause;
(2) a waiver of the right to a jury trial, if applicable, in an action brought by or against a consumer;
(3) an assignment of or order for payment of wages or other compensation for services; or
(4) a waiver of a provision of this subchapter.