Minnesota Session Laws - 1987, Regular Session

  

                         Laws of Minnesota 1987 

                         CHAPTER 37-S.F.No. 457 
           An act relating to commerce; regulating collection 
          agencies and those acting under the authority of a 
          collection agency; providing cash deposits in lieu of 
          the required bond; establishing prohibited practices; 
          prescribing the enforcement powers of the commissioner;
          amending Minnesota Statutes 1986, sections 332.31, by 
          adding a subdivision; 332.33; 332.34; 332.37; and 
          332.40, subdivision 3.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 332.31, is 
amended by adding a subdivision to read: 
    Subd. 6.  [COLLECTOR.] "Collector" is a person acting under 
the authority of a collection agency under section 332.31, 
subdivision 3, and on its behalf in the business of collection 
for others an account, bill, or other indebtedness except as 
otherwise provided in this chapter. 
    Sec. 2.  Minnesota Statutes 1986, section 332.33, is 
amended to read:  
    332.33 [LICENSES.] 
    Subdivision 1.  [REQUIREMENT.] Except as hereinafter 
otherwise provided in this chapter, no person shall conduct 
within this state a collection agency or engage within this 
state in the business of collecting claims for others as defined 
in sections 332.31 to 332.45, without having first applied for 
and obtained a license.  
    Subd. 2.  [PENALTY.] Any A person who shall carry carries 
on business as a collection agency or acts as a collector 
without first having obtained a license pursuant to sections 
332.31 to 332.45, or who shall carry carries on such this 
business after the revocation, suspension, or expiration of 
any a license shall be is guilty of a misdemeanor. 
    Subd. 3.  [TERM.] Licenses granted issued or renewed by the 
commissioner of commerce under sections 332.31 to 332.45 shall 
expire on June 30.  All renewals of licenses shall likewise 
expire on June 30.  Each license shall plainly state the name 
and business address of the licensee, and shall be posted in a 
conspicuous place in the office where the business is 
transacted.  The fee for each license and renewal as collection 
agency shall be $100.  The fee for each license and renewal as 
collector shall be $10.  A licensee who desires to carry on 
business in more than one place within the state shall procure a 
license for each place where the business is to be conducted.  
    Subd. 4.  [INVESTIGATIONS.] The commissioner may require 
such financial statements and references of all applicants for a 
license as the commissioner deems considers necessary; and.  The 
commissioner may make or cause to be made an independent 
investigation concerning the applicant's reputation, integrity, 
competence, and net worth, at the expense of the applicant 
for such the initial investigation, not to exceed $100, and for 
that purpose may require such a deposit against the cost thereof 
of the investigation as the commissioner deems considers 
adequate.  Such The investigation may cover all managerial 
personnel employed by or associated with the applicant.  
    Subd. 5.  [ISSUANCE.] Every application for a collection 
agency license or renewal shall be acted upon promptly by the 
commissioner but in no event more than 45 days after receipt 
of said the application.  Every application for a collector's 
license or renewal shall be acted upon promptly by the 
commissioner but in no event more than 15 days after receipt of 
the completed application.  Each applicant may be issued a 
temporary license after submitting a complete application which 
meets all requirements for licensure.  This license shall be 
effective until a permanent license is issued by the 
commissioner.  If the application shall comply complies in form 
and substance with the provisions of sections 332.31 to 332.45 
and the rules promulgated thereunder adopted under those 
sections and the commissioner shall find finds that the 
applicant is qualified under the provisions of sections 332.31 
to 332.45, the commissioner shall issue a license 
forthwith immediately.  If the application shall is not be 
sufficient in form or substance, the commissioner shall reject 
it and notify the applicant of the manner in which it is 
deficient.  Such The rejection shall be is without prejudice to 
the filing of a new application.  On finding that the applicant 
is not qualified under the provisions of sections 332.31 to 
332.45, the commissioner shall reject the application and shall 
give the applicant written notice of such the rejection and the 
reasons therefor for the rejection.  
    Subd. 6.  [DEPOSIT OF FEES.] All money received by the 
commissioner shall be deposited in the general fund of the state 
treasury.  
    Sec. 3.  Minnesota Statutes 1986, section 332.34, is 
amended to read:  
    332.34 [BOND.] 
    The commissioner of commerce shall require each collection 
agency licensee to file and maintain in force a corporate surety 
bond, in a form to be prescribed by, and acceptable to, the 
commissioner, and in the sum of $10,000 effective July 1, 1982 
and $20,000 effective July 1, 1983.  An applicant for a new or 
renewal license may request that the amount of the bond hereby 
required be reduced to an amount which shall be not less than 
$5,000.  This request may be granted upon a showing that the 
total dollar amount received from debtors by the collection 
agency in the preceding fiscal year did not exceed $30,000.  A 
collection agency may deposit cash in and with a depository 
acceptable to the commissioner in an amount and in the manner 
prescribed and approved by the commissioner in lieu of a bond. 
    Sec. 4.  Minnesota Statutes 1986, section 332.37, is 
amended to read:  
    332.37 [PROHIBITED PRACTICES.] 
    No collection agency or collectors shall:  (1) in 
collection letters or publications, or in any communication, 
oral or written threaten wage garnishment or legal suit by a 
particular lawyer, unless it has actually retained the lawyer; 
    (2) use or employ constables, sheriffs or any other officer 
authorized to serve legal papers in connection with the 
collection of a claim, except when performing their legally 
authorized duties; 
    (3) use or threaten to use methods of collection which 
violate Minnesota law; 
    (4) furnish legal advice or otherwise engage in the 
practice of law or represent that it is competent to do so; 
    (5) communicate with debtors in a misleading or deceptive 
manner by using the stationery of a lawyer, forms or instruments 
which only lawyers are authorized to prepare, or instruments 
which simulate the form and appearance of judicial process; 
    (6) exercise authority on behalf of a creditor to employ 
the services of lawyers unless the creditor has specifically 
authorized the agency in writing to do so and the agency's 
course of conduct is at all times consistent with a true 
relationship of attorney and client between the lawyer and the 
creditor; 
    (7) publish or cause to be published any list of debtors 
except for credit reporting purposes, use shame cards or shame 
automobiles, advertise or threaten to advertise for sale any 
claim as a means of forcing payment thereof, or use similar 
devices or methods of intimidation; 
    (8) refuse to return any claim or claims and all valuable 
papers deposited with a claim or claims upon written request of 
the creditor, claimant or forwarder after tender of the amounts 
due and owing to the agency within 30 days after the request; 
refuse or intentionally fail to account to its clients for all 
money collected within 30 days from the last day of the month in 
which the same is collected; or, refuse or fail to furnish at 
intervals of not less than 90 days upon written request of the 
claimant or forwarder, a written report upon claims received 
from the claimant or forwarder; 
    (9) operate under a name or in a manner which implies that 
the agency is a branch of or associated with any department of 
federal, state, county or local government or an agency thereof; 
    (10) commingle money collected for a customer with the 
agency's operating funds or use any part of a customer's money 
in the conduct of the agency's business; 
    (11) transact business or hold itself out as a debt 
prorater, debt adjuster, or any person who settles, adjusts, 
prorates, pools, liquidates or pays the indebtedness of a 
debtor, unless there is no charge to the debtor, or the pooling 
or liquidation is done pursuant to court order or under the 
supervision of a creditor's committee;  
    (12) violate any of the provisions of the Fair Debt 
Collection Practices Act of 1977 while attempting to collect on 
any account, bill or other indebtedness; or 
     (13) communicate with a debtor by use of a recorded message 
utilizing an automatic dialing announcing device unless the 
recorded message is immediately preceded by a live operator who 
discloses prior to the message the name of the collection agency 
and the fact the message intends to solicit payment and the 
operator obtains the consent of the debtor to hearing the 
message.  
    Sec. 5.  Minnesota Statutes 1986, section 332.40, 
subdivision 3, is amended to read:  
    Subd. 3.  [COMMISSIONER'S POWERS.] For the purpose of any 
investigation or proceeding under sections 332.31 to 332.45, the 
commissioner or any person designated by the commissioner may 
administer oaths and affirmations, subpoena collection 
agencies or collectors and compel their attendance, take 
evidence and require the production of any books, papers, 
correspondence, memoranda, agreements or other documents or 
records which the commissioner deems relevant or material to the 
inquiry.  The subpoena shall contain a written statement setting 
forth the circumstances which have reasonably caused the 
commissioner to believe that a violation of sections 332.31 to 
332.45 may have occurred.  
    In the event that the collection agency or collector 
refuses to obey the subpoena, or should the commissioner, upon 
completion of the examination of the collection agency or 
collector, reasonably conclude that a violation has occurred, 
the commissioner may examine additional witnesses, including 
third parties, as may be necessary to complete the investigation.
    Any subpoena issued pursuant to this section shall be 
served by certified mail or by personal service.  Service shall 
be made at least 15 days prior to the date of appearance. 
    Approved April 20, 1987