2001 Minnesota Statutes

CHAPTER 332. Collection, credit services, debt prorating

    332.01 Subdivision 1.  Repealed, 1969 c 766 s 17 

    Subd. 2.  Repealed, 1969 c 766 s 17 

    Subd. 3.  Repealed, 1969 c 766 s 17 

    Subd. 4.  Repealed, 1969 c 766 s 17; 1971 c 25 s 
 103 

  332.02 Repealed, 1969 c 766 s 17 

  332.03 Repealed, 1969 c 766 s 17 

  332.04 Repealed, 1969 c 1120 s 21 

  332.05 Repealed, 1969 c 1120 s 21 

  332.06 Repealed, 1969 c 1120 s 21 

  332.07 Repealed, 1969 c 1120 s 21 

  332.08 Repealed, 1969 c 1120 s 21 

  332.09 Repealed, 1969 c 1120 s 21 

  332.10 Repealed, 1969 c 1120 s 21 

    332.11 Subdivision 1.  Repealed, 1971 c 25 s 62 

    Subd. 2.  Repealed, 1969 c 1120 s 21 

     332.12 Declaration of policy.  

    The business of rendering financial planning service by 
 compromising, settling, adjusting, prorating or liquidating the 
 indebtedness of a debtor is a matter of public interest and 
 concern and is subject to rules and control in the public 
 interest.  

    HIST: 1969 c 1120 s 1; 1985 c 248 s 70 

     332.13 Definitions. 

    Subdivision 1.    Scope.  Unless a different meaning is 
 clearly indicated by the context, the following words, terms, 
 and phrases, where used in sections 332.12 to 332.29, shall have 
 the meanings ascribed to them in this section.  

    Subd. 2.    Debt prorating.  "Debt prorating" means the 
 performance of any one or more of the following: 

    (a) managing the financial affairs of an individual by 
 distributing income or money to the creditors thereof; 

    (b) receiving funds for the purpose of distributing said 
 funds among creditors in payment or partial payment of 
 obligations of a debtor; or 

    (c) settling, adjusting, prorating, pooling, or liquidating 
 the indebtedness of a debtor.  Any person so engaged or holding 
 out as so engaged shall be deemed to be engaged in debt 
 prorating regardless of whether or not a fee is charged for such 
 services.  This term shall not include services performed by the 
 following when engaged in the regular course of their respective 
 businesses and professions: 

    (1) Attorneys at law, escrow agents, accountants, 
 broker-dealers in securities; 

    (2) Banks, state or national, trust companies, savings 
 associations, title insurance companies, insurance companies and 
 all other lending institutions duly authorized to transact 
 business in the state of Minnesota, provided no fee is charged 
 for such service; 

    (3) Persons who, as employees on a regular salary or wage 
 of an employer not engaged in the business of debt prorating, 
 perform credit services for their employer; 

    (4) Public officers acting in their official capacities and 
 persons acting pursuant to court order; 

    (5) Nonprofit corporations, organized under Minnesota 
 Statutes 1967, Chapter 317, giving debt prorating service, 
 provided no fee is charged for such service; 

    (6) Any person while performing services incidental to the 
 dissolution, winding up or liquidation of a partnership, 
 corporation or other business enterprise; 

    (7) The state of Minnesota, its political subdivisions, 
 public agencies and their employees; 

    (8) Credit unions, provided no fee is charged for such 
 service; 

    (9) "Qualified organizations" designated as representative 
 payees for purposes of the Social Security and Supplemental 
 Security Income representative payee system and the federal 
 Omnibus Budget Reconciliation Act of 1990, Public Law Number 
 101-508; and 

    (10) Accelerated mortgage payment providers.  "Accelerated 
 mortgage payment providers" are persons who, after satisfying 
 the requirements of sections 332.30 to 332.303, receive funds to 
 make mortgage payments to a lender or lenders, on behalf of 
 mortgagors, in order to exceed regularly scheduled minimum 
 payment obligations under the terms of the indebtedness.  The 
 term does not include:  (i) persons or entities described in 
 clauses (1) to (9); (ii) mortgage lenders or servicers, 
 industrial loan and thrift companies, or regulated lenders under 
 chapter 56; or (iii) persons authorized to make loans under 
 section 47.20, subdivision 1. 

    For purposes of this clause and sections 332.30 to 332.303, 
 "lender" means the original lender or that lender's assignee, 
 whichever is the current mortgage holder. 

    Subd. 3.    Attorney general.  "Attorney general" means 
 the attorney general of the state of Minnesota.  

    Subd. 4.    Debtor.  "Debtor" means the person for whom 
 the debt prorating service is performed.  

    Subd. 5.    Person.  "Person" means any individual, 
 firm, partnership, association or corporation.  

    Subd. 6.    Licensee.  "Licensee" means any person 
 licensed by the commissioner pursuant to sections 332.12 to 
 332.29 and, where used in conjunction with an act or omission 
 required or prohibited by sections 332.12 to 332.29, shall mean 
 any person performing debt prorating services.  

    Subd. 7.    This act.  The term "this act" means 
 sections 332.12 to 332.29 as enacted and hereafter amended.  

    Subd. 8.    Commissioner.  "Commissioner" means 
 commissioner of commerce.  

    HIST: 1969 c 1120 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1986 c 444; 1992 c 587 art 1 s 28; 1994 c 638 s 1; 1995 
 c 202 art 1 s 25 

     332.14 Requirement of license.  

    On or after January 1, 1970, it shall be unlawful for any 
 person to operate a debt prorating service or engage in said 
 activity as defined in section 332.13 except as authorized by 
 law without first having obtained a license as hereinafter 
 provided.  

    HIST: 1969 c 1120 s 3 

     332.15 License. 

    Subdivision 1.    Form.  Application for a license to 
 operate a debt prorating service in this state shall be made in 
 writing to the commissioner, under oath, in the form prescribed 
 by the commissioner, and shall contain the full name and address 
 of the applicant, the business to be conducted, and, if the 
 applicant is a partnership or association, of every member 
 thereof and, if a corporation, of each officer, director and 
 shareholder owning more than five percent of outstanding common 
 stock thereof and such other information and material as the 
 commissioner may require.  

    Subd. 2.    License for each location.  Each person 
 operating a debt prorating service shall obtain a license for 
 each location and place of business, including each branch 
 office.  Such person shall submit a separate application for 
 each place of business.  The full license fee shall be payable 
 only for one such place of business.  For each additional place 
 of business the license fee shall be $100.  

    Subd. 3.    Fees.  Each applicant, at the time of making 
 such application, shall pay to the commissioner the sum of $100 
 as a fee for investigation of the applicant, and the additional 
 sum of $250 as a license fee.  If the application is denied, 
 said license fee shall be returned to the applicant.  

    Subd. 4.    Bond.  Every applicant shall submit to the 
 commissioner at the time of the application for a license, a 
 surety bond in which the applicant shall be the obligor, in a 
 sum to be determined by the commissioner but not less than 
 $5,000, and in which an insurance company, which is duly 
 authorized by the state of Minnesota to transact the business of 
 fidelity and surety insurance, shall be a surety; provided, 
 however, the commissioner may accept a deposit in cash, or 
 securities such as may legally be purchased by savings banks or 
 for trust funds of an aggregate market value equal to the bond 
 requirement, in lieu of the surety bond, such cash or securities 
 to be deposited with the state treasurer.  The commissioner may 
 also require a fidelity bond in an appropriate amount covering 
 employees of any applicant.  Each branch office or additional 
 place of business of an applicant shall be bonded as provided 
 herein.  In determining the bond amount necessary for the 
 maintenance of any office be it surety, fidelity or both the 
 commissioner shall consider the financial responsibility, 
 experience, character and general fitness of the agency and its 
 operators and owners; the volume of business handled or proposed 
 to be handled; the location of the office and the geographical 
 area served or proposed to be served; and such other information 
 the commissioner may deem pertinent based upon past performance, 
 previous examinations, annual reports and manner of business 
 conducted in other states. 

    Subd. 5.    Condition of bond.  The applicant shall be 
 the obligor.  The bond shall run to the state of Minnesota for 
 the use of the state and of any person or persons who may have a 
 cause of action against the obligor arising out of the obligor's 
 activities as a debt prorater.  Such bond shall be conditioned 
 that said obligor will not commit any fraudulent act and will 
 faithfully conform to and abide by the provisions of sections 
 332.12 to 332.29 and of all rules lawfully made by the 
 commissioner hereunder and pay to the state and to any such 
 person or persons any and all money that may become due or owing 
 to the state or to such person or persons from said obligor 
 under and by virtue of the provisions of sections 332.12 to 
 332.29.  

    Subd. 6.    Right of action on bond.  If the licensee 
 has failed to account to a debtor or distribute to the debtor's 
 creditors such amounts as are required by sections 332.12 to 
 332.29 and the contract between the debtor and licensee, the 
 debtor or the debtor's legal representative or receiver, the 
 commissioner or the attorney general, shall have, in addition to 
 all other legal remedies, a right of action in the name of the 
 debtor on the bond or the security given pursuant to the 
 provisions of this section, for loss suffered by the debtor, not 
 exceeding the face of the bond or security, and without the 
 necessity of joining the licensee in such suit or action.  

    HIST: 1969 c 1120 s 4; 1971 c 441 s 1; 1985 c 248 s 70; 1986 c 
 444; 1992 c 564 art 4 s 15; 1999 c 151 s 43,44 

     332.16 Qualifications for license.  

    Upon the filing of the application, approval of the bond 
 and payment of the specified fees, the commissioner shall 
 conduct an investigation.  The commissioner shall thereafter 
 issue a license to the applicant on finding: 

    (a) That the financial responsibility, experience, 
 character and general fitness of the applicant, and of the 
 members thereof, if the applicant be a partnership or 
 association, and of the officers, directors and each of the 
 stockholders who own more than five percent of outstanding stock 
 thereof, if the applicant be a corporation, are such as to 
 indicate that the business will be operated fairly and honestly 
 within the purposes of sections 332.12 to 332.29, and that any 
 other business or profession engaged in by the applicant or such 
 persons does not create a conflict of interest with respect to 
 the ability to represent an individual fairly; 

    (b) That neither the applicant, nor any of such persons has 
 been convicted of any crime or ordinance involving moral 
 turpitude within the past ten years; 

    (c) That neither the applicant nor any of such persons has 
 had a record of having defaulted in the payment of money 
 collected for others, including the discharge of debts through 
 bankruptcy proceedings; 

    (d) That neither the applicant nor any of such persons has 
 had a license to engage in debt prorating revoked or removed in 
 this or any other state; 

    (e) That neither the applicant nor any of such persons 
 operates or is an employee or owner of a collection agency or 
 process serving business; and 

    (f) That such person or the applicant and all of such 
 persons have fully complied with the requirements of sections 
 332.12 to 332.29 and all valid rules and orders of the 
 commissioner.  Said license shall permit the applicant to engage 
 in the debt prorating service business in accordance with the 
 provisions of sections 332.12 to 332.29 at the location 
 specified in the application.  The license shall remain in full 
 force and effect for one calendar year or until it is 
 surrendered by the licensee or revoked or suspended by the 
 commissioner pursuant hereto.  

    HIST: 1969 c 1120 s 5; 1971 c 441 s 2; 1985 c 248 s 70; 1986 c 
 444 

     332.17 Renewal of license. 

    Each licensee under the provisions of sections 332.12 to 
 332.29 shall, not more than 60 nor less than 30 days before its 
 license is to expire, make application to the commissioner for 
 renewal of its license.  Such application for renewal shall be 
 on a form prescribed by the commissioner and shall be 
 accompanied by payment of the sum of $250 as a license fee, and 
 a bond as required in the case of an original application.  The 
 commissioner may investigate the licensee and determine its 
 continued fitness as in the case of an original application.  If 
 the commissioner shall renew the license, said renewal shall be 
 effective for one year from the date on which the previous 
 license expired. 

    HIST: 1969 c 1120 s 6; 1999 c 151 s 45 

     332.18 License display and transferability; change of 
  address.  

    Each license issued hereunder shall be kept conspicuously 
 posted in the place of business of the licensee.  The business 
 address may be changed by any licensee upon ten days' prior 
 written notice thereof to the commissioner.  No license shall be 
 transferable or assignable without the consent of the 
 commissioner and the licensee shall be limited solely to the 
 business of debt prorating service.  

    HIST: 1969 c 1120 s 7 

     332.19 Denial of license. 

    After January 1, 1970, all applications for an initial 
 license hereunder shall be approved or denied within 60 days of 
 their filing with the commissioner.  The applicant shall be so 
 notified of any denial of the application by certified mail 
 directed to the applicant at the address shown on the 
 application.  The applicant shall be given an opportunity to be 
 heard thereon before the commissioner within 30 days after such 
 notice is served.  Such notice and hearing shall comply with the 
 Minnesota Administrative Procedure Act, Minnesota Statutes, 
 sections 14.57 to 14.69.  Persons subject to the terms of 
 sections 332.12 to 332.29 who are providing debt prorating 
 services on July 1, 1969 shall submit their applications for 
 licenses not later than September 1, 1969. 

    HIST: 1969 c 1120 s 8; 1978 c 674 s 60; 1982 c 424 s 130; 1986 
 c 444; 1987 c 384 art 2 s 1 

     332.20 Suspending, revoking, or refusing to renew 
  license.  

    Subdivision 1.    Procedure.  The commissioner may 
 revoke, suspend or refuse to renew any license issued hereunder, 
 for cause as defined in this section.  Revocation or refusal to 
 renew shall be upon notice and hearing as prescribed in the 
 Minnesota Administrative Procedure Act, Minnesota Statutes, 
 sections 14.57 to 14.69.  Said notice shall set a time for 
 hearing before the commissioner not less than 20 nor more than 
 30 days after service of such notice, provided, the licensee may 
 waive such 20 day minimum.  The commissioner may, in such 
 notice, suspend the license for a period not to exceed 60 days.  
 Unless the notice states that the license is suspended, pending 
 the determination of the main issue, the licensee may continue 
 to transact business until the final decision of the 
 commissioner.  If the license is so suspended, the commissioner 
 shall hold a hearing and render a final determination within 10 
 days of a request by the licensee.  If the commissioner fails to 
 do so, the suspension shall terminate and be of no force or 
 effect.  

    Subd. 2.    Cause.  The commissioner may revoke, 
 suspend and refuse to renew any license hereunder on finding 
 that: 

    (a) Any licensee has failed to pay any fee required herein, 
 or to maintain in effect the bond required under the provisions 
 of sections 332.12 to 332.29 or failed to comply with any order, 
 decision or finding of the commissioner made pursuant to and 
 within the authority of sections 332.12 to 332.29; or that 

    (b) The licensee has violated any provisions of sections 
 332.12 to 332.29 or any rule or direction lawfully made by the 
 commissioner under and within the authority of sections 332.12 
 to 332.29; or that 

    (c) Any material fact or condition exists which, if it had 
 existed at the time of the original application for a license, 
 would have warranted the commissioner in refusing its issuance; 
 or that 

    (d) Any applicant or party to an application has made any 
 false statement or representation to the commissioner in 
 applying for a license hereunder.  

    Subd. 3.    Notification of interested persons.  After 
 the notice and hearing required in subdivision 1 hereof, upon 
 issuing an order revoking a license, the commissioner may notify 
 all individuals who have contracts with the affected licensee 
 and all creditors who have agreed to a plan of forbearance that 
 such license has been revoked and that said order is subject to 
 appeal.  

    Subd. 4.    Receive funds of licensee.  When an order 
 is issued revoking or refusing to renew a license, the 
 commissioner shall apply to the district court for appointment 
 of a receiver to receive the assets of the licensee pending a 
 final determination of the validity of said order.  

    HIST: 1969 c 1120 s 9; 1982 c 424 s 130; 1985 c 248 s 70; 1986 
 c 444; 1987 c 384 art 2 s 1 

     332.21 Contracts. 

    (a) Each contract entered into by the licensee and the 
 debtor shall be in writing and signed by both parties.  The 
 licensee shall furnish the debtor with a copy of the signed 
 contract.  Each such contract shall set forth: 

    (1) the dollar charges agreed upon for the services of the 
 licensee, clearly disclosing to such debtor the total amount 
 which may be retained by licensee for services if the contract 
 is fully performed, which maximum amount would be the 
 origination fee together with 15 percent of the amount scheduled 
 to be liquidated by such contract.  This disclosure must state 
 that if the amount of debt owed is increased by interest, late 
 fees, over the limit fees, and other amounts imposed by the 
 creditor or by reason of the events under paragraph (c), the 
 length of the contract would be extended and remain in force and 
 that the total dollar charges agreed upon may increase at the 
 rate agreed upon in the original contract; 

    (2) the terms upon which the debtor may cancel the contract 
 as set out in section 332.23; 

    (3) all debts which are to be managed by the licensee, 
 including the name of the creditor and the amount of the debt; 
 and 

    (4) such other matter as the commissioner may require by 
 rule.  

    (b) A contract shall not be effective until a payment has 
 been made to the licensee for distribution to creditors or until 
 three business days after the signing thereof, whichever is 
 later.  Within such period an individual may disaffirm said 
 contract and upon such disaffirmance said contract shall be null 
 and void.  

    (c) Total fees contained in the contract may be exceeded in 
 relation to creditors under open-end agreements if it is agreed 
 to in the contract and the additional debts so contracted to be 
 prorated do not exceed ten percent of the original debts in the 
 contract or written revisions to the original contract. 

    HIST: 1969 c 1120 s 10; 1971 c 441 s 3; 1985 c 248 s 70; 1996 
 c 414 art 1 s 40; 1997 c 157 s 61 

     332.22 Books, records, and information.  

    Subdivision 1.    Records retention.  Every licensee 
 shall keep, and use in the licensee's business, such books, 
 accounts, and records as will enable the commissioner to 
 determine whether such licensee is complying with the provisions 
 of sections 332.12 to 332.29 and of the rules, orders and 
 directives promulgated by the commissioner pursuant to sections 
 332.12 to 332.29.  Every licensee shall preserve such books, 
 accounts and records for at least five years after making the 
 final entry on any transaction recorded therein.  Examinations 
 of the books, records and method of operations as shall be 
 conducted under the supervision of the commissioner herein shall 
 be done at the cost of the licensee.  The cost shall be assessed 
 as determined pursuant to section 46.131, as amended from time 
 to time.  

    Subd. 2.    Statements to debtors.  Each licensee shall 
 maintain and shall make available records and accounts which 
 will enable each debtor to ascertain the amounts paid to the 
 creditors of said debtor.  A statement showing amounts received 
 from the debtor, disbursements to each creditor, amounts which 
 any creditor has agreed to accept as payment in full for any 
 debt owed the creditor by the debtor, charges deducted by the 
 licensee and such other information as the commissioner may 
 prescribe shall be furnished by the licensee to the debtor at 
 least once every three months and, in addition, upon any 
 cancellation or termination of the contract.  In addition to the 
 statements required by this subdivision, each debtor shall have 
 reasonable access, without cost, to information in the 
 licensee's files applicable to such debtor.  Such statements, 
 records and accounts shall otherwise remain confidential except 
 for duly authorized state and government officials, the 
 commissioner, the attorney general, the debtor and the debtor's 
 representative and designees.  Each licensee shall prepare and 
 retain in the file of each debtor a written analysis of the 
 debtor's income and expenses to substantiate that the plan of 
 payment is feasible and practical.  

    HIST: 1969 c 1120 s 11; 1971 c 441 s 4; 1985 c 248 s 70; 1986 
 c 444 

     332.23 Fees, payments, and cancellations. 

    Subdivision 1.    Origination fee, credit background 
 report cost.  The licensee may charge an origination fee of 
 not more than $25 and collect from the debtor the actual cost of 
 a credit background report obtained from a credit reporting 
 agency not related to or affiliated with the licensee or if 
 affiliated, the total cost of the report may not exceed $8.  The 
 costs to the debtor of said origination fee and credit 
 background report may be made from the originating amount paid 
 by the debtor to the licensee.  The cost of only one credit 
 background report may be collected from the debtor in any 
 12-month period. 

    Subd. 2.    Withdrawal of fee.  The licensee may 
 withdraw and retain as partial payment of the licensee's total 
 fee not more than 15 percent of any sum deposited with the 
 licensee by the debtor for distribution.  The remaining 85 
 percent must be disbursed to listed creditors pursuant to and in 
 accordance with the contract between the debtor and the licensee 
 within 35 days after receipt unless the reasonable payment of 
 one or more of the debtor's obligations requires that the funds 
 be held for a longer period so as to accumulate a sum certain or 
 where the debtor's payment is returned for nonsufficient funds, 
 then no longer than 42 days.  Total payment to licensee for 
 services rendered, excluding the origination fee and any credit 
 background report, shall not exceed 15 percent of funds 
 deposited with licensee by debtor for distribution. 

    Subd. 3.    Cancellation.  All contracts with debtors 
 for debt prorating service shall contain on their face, in 
 easily readable characters, a provision entitling either party 
 to cancel the contract without cause upon 30 days' written 
 notice.  The contract shall automatically terminate upon the 
 payment of all listed debts and fees.  In the event of 
 cancellation by either party, the licensee shall notify the 
 debtor's creditors of such cancellation within ten days thereof. 

    Subd. 4.    Additional contracts; recurring payments.  
 Separate and additional contracts shall be entered into by the 
 licensee and debtor for the management of any debt not listed in 
 any other executory contract or for any increase in the size of 
 any debt included in any other contract, provided, the licensee 
 shall not charge any origination fee for any such additional 
 contract.  No fees or charges shall be received or retained by 
 the licensee for any handling of recurrent payments.  Recurrent 
 payments shall include current rent, house, utility, telephone, 
 maintenance as defined in section 518.27, child support, 
 insurance premium and such other payments as the commissioner 
 may by rule prescribe. 

    Subd. 5.    Advance payments.  Notwithstanding anything 
 herein to the contrary no fees or charges shall be received or 
 retained for any payments by the debtor made more than the 
 following number of days in advance of the date specified in the 
 contract on which they are due:  (a) 42 days in the case of 
 contracts requiring monthly payments; (b) 15 days in the case of 
 contracts requiring biweekly payments; or (c) seven days in the 
 case of contracts requiring weekly payments.  For those 
 contracts which do not require payments in specified amounts, a 
 payment shall be deemed an advance payment to the extent it 
 exceeds twice the average regular payment theretofore made by 
 the debtor pursuant to that contract.  This subdivision shall 
 not apply when it is the intention of the debtor to use such 
 advance payments to satisfy future payment of obligations due 
 within 30 days under the contract. 

    Subd. 6.    Consent of creditors.  The licensee shall 
 actively seek to obtain the consent of all creditors to the plan 
 of distribution set forth in the contract. Failure to obtain 
 such consent of all such creditors within 60 days of the date 
 upon which the contract is executed shall entitle the debtor to 
 cancel the contract within 120 days of the date of such 
 execution without liability to pay any cancellation fee.  
 Consent by a creditor may be express and in writing, or may be 
 evidenced by acceptance of a payment made pursuant to the plan 
 of distribution set forth in the contract.  The licensee shall 
 notify the debtor within ten days after the expiration of the 60 
 day period prescribed in this subdivision of any failure to 
 obtain the required consent and of the debtor's right to cancel 
 without penalty.  Such notice shall be in such form as the 
 commissioner shall prescribe.  Nothing contained in this section 
 shall be deemed to require the return of any origination fee and 
 any fees earned by the licensee prior to cancellation or default.

    Subd. 7.    Excess charges.  If a licensee contracts 
 for, receives or makes any charge in excess of the maximum 
 permitted by sections 332.12 to 332.29, except as the result of 
 an accidental and bona fide error, the licensee's contract with 
 the debtor shall be void and the licensee shall return to the 
 debtor the amount of all moneys received from the debtor or on 
 the debtor's behalf from the commencement of the contract which 
 have not been distributed to creditors. 

    Subd. 8.    Payments held in trust.  Any payment 
 received by a licensee from or on behalf of a debtor shall be 
 held in trust by the licensee from the moment it is received.  
 The licensee shall not commingle such payment with the 
 licensee's own property or funds, but shall maintain a separate 
 trust account and deposit in such account all such payments 
 received.  All disbursements, whether to the debtor or to the 
 creditors of the debtor, or to the licensee, shall be made from 
 such account. 

    HIST: 1969 c 1120 s 12; 1971 c 441 s 5-8; 1978 c 772 s 62; 
 1985 c 248 s 70; 1986 c 444; 1995 c 202 art 2 s 30,31; 1997 c 
 157 s 62-64 

     332.24 Prohibitions.  

    A licensee shall not: 

    (1) Purchase from a creditor any obligation of a debtor; 

    (2) Use, threaten to use, seek to have used or seek to have 
 threatened the use of any legal process, including but not 
 limited to garnishment and repossession of personal property, 
 against any debtor while the contract between the licensee and 
 the debtor remains executory; 

    (3) Advertise or make any statement or representation with 
 regard to the rates, terms, or conditions of debt prorating 
 service which is false, misleading or deceptive; 

    (4) Require as a condition of performing debt prorating 
 services nor shall the contract between the licensee and a 
 debtor require the purchase of any services, stock, insurance, 
 commodity or other property or any interest therein either by 
 the debtor or the licensee; 

    (5) Compromise any debts unless the prior written approval 
 of the debtor has been obtained to such compromise and unless 
 such compromise shall inure solely to the benefit of the debtor; 

    (6) Receive from any debtor as security or in payment of 
 any fee a promissory note or other promise to pay or any 
 mortgage or other security, whether as to real or personal 
 property; 

    (7) Lend money or credit to any debtor if any interest or 
 fee is charged; 

    (8) Take any confession of judgment or power of attorney to 
 confess judgment against the debtor or appear as the debtor in 
 any judicial proceedings; 

    (9) Take, concurrent with the signing of the contract, or 
 as a part of the contract or as part of the application for the 
 contract, a release of any obligation required to be performed 
 on the part of the licensee; 

    (10) Offer, pay or give any substantial cash fee, gift, 
 bonus, premium, reward or other compensation to any person, 
 other than an employee of the licensee for referring any 
 prospective customer to the licensee; 

    (11) Receive any cash, fee, gift, bonus, premium, reward, 
 or other compensation from any person other than the debtor or a 
 person in the debtor's behalf in connection with activities as a 
 licensee; provided, however, that this paragraph shall not apply 
 to a licensee which is a bona fide nonprofit corporation, duly 
 organized under chapter 317A; 

    (12) Enter into a contract with a debtor unless a thorough 
 written budget analysis indicates that the debtor can reasonably 
 meet the requirements of the financial adjustment plan and will 
 be benefited by the plan; 

    (13) In any way charge or purport to charge or provide any 
 debtor credit insurance in conjunction with any contract or 
 agreement involved in the financial adjustment plan.  

    Any violation of the prohibitions contained in this section 
 shall be cause for the suspension, revocation or refusal to 
 renew a license pursuant to section 332.20 and shall also 
 constitute a violation of the provisions of sections 332.12 to 
 332.29 to which the penalties prescribed in section 332.26 shall 
 attach.  In addition to such penalties any person attempting to 
 perform a debt prorating service in this state without 
 maintaining an office in this state shall be subject to a fine 
 not to exceed $10,000, as determined by the commissioner.  

    HIST: 1969 c 1120 s 13; 1971 c 441 s 9; 1986 c 444; 1989 c 304 
 s 137 

     332.25 Rules.  

    The commissioner shall make and file in accordance with the 
 provisions of chapter 14, such reasonable rules as shall be 
 necessary for the administration of sections 332.12 to 332.29.  

    HIST: 1969 c 1120 s 14; 1982 c 424 s 130; 1985 c 248 s 70 

     332.26 Penalties.  

    Any person willfully violating any of the provisions of 
 sections 332.12 to 332.29 or of any rules promulgated pursuant 
 hereto shall be guilty of a gross misdemeanor.  

    HIST: 1969 c 1120 s 15; 1985 c 248 s 70 

     332.27 Contracts void.  

    Any contract for debt prorating service as defined in 
 sections 332.12 to 332.29 made by an unlicensed person shall be 
 null and void and of no legal effect and all fees paid to such 
 person pursuant to such contract shall be recoverable with 
 reasonable attorney's fees.  

    HIST: 1969 c 1120 s 16 

     332.28 Injunction.  

    To engage in a debt prorating service business without a 
 valid, existing license so to do is hereby declared to be 
 inimical to the public welfare and constitutes a public 
 nuisance.  The attorney general or the county attorney of any 
 county may apply for an injunction in district court to enjoin 
 any person from engaging in said business and any such court may 
 issue temporary or permanent injunctions as the circumstances 
 shall require.  Such injunction proceedings shall be in addition 
 to and not in lieu of penalties and remedies otherwise provided 
 in sections 332.12 to 332.29.  

    HIST: 1969 c 1120 s 17 

     332.29 Investigation. 

    Subdivision 1.    Examination; audit.  The commissioner 
 shall examine the books and records of every licensee hereunder 
 and of any person engaged in the business of debt prorating 
 service as defined in section 332.13 at least once every 18 
 calendar months.  The commissioner once during any calendar 
 year, may require the submission of an audit prepared by a 
 certified public accountant of the books and records of each 
 licensee hereunder.  If the licensee has, within one year 
 previous to the commissioner's demand, had an audit prepared for 
 some other purpose, this audit may be submitted to satisfy the 
 requirement of this section.  The commissioner may investigate 
 any complaint concerning violations of sections 332.12 to 332.29 
 and may require the attendance and sworn testimony of witnesses 
 and the production of documents.  

    Subd. 2.    Duties of attorney general and county 
 attorney.  Upon transmittal from the commissioner of a written 
 complaint of any person feeling aggrieved, the attorney general 
 may forward such complaint to the county attorney of the county 
 wherein the business is situated, who shall investigate and 
 report.  The attorney general or such county attorney may 
 require the attendance and sworn testimony of witnesses and the 
 production of documents.  

    HIST: 1969 c 1120 s 18; 1987 c 349 art 1 s 39 

     332.30 Accelerated mortgage payment provider; bond 
  requirements. 

    (a) Before beginning business in this state, an accelerated 
 mortgage payment provider, as defined in section 332.13, 
 subdivision 2, clause (10), shall submit to the commissioner of 
 commerce an authorization fee of $250 and either: 

    (1) a surety bond in which the accelerated mortgage payment 
 provider is the obligor, in an amount determined by the 
 commissioner; or 

    (2) if the commissioner agrees to accept it, a deposit: 

    (i) in cash in an amount equivalent to the bond amount; or 

    (ii) of authorized securities, as defined in section 50.14, 
 with an aggregate market value equal to the bond amount.  The 
 cash or securities must be deposited with the state treasurer. 

    (b) The amount of the bond required by the commissioner 
 shall vary with the amount of Minnesota client funds held or to 
 be held by the obligor.  For new businesses, the bond must be no 
 less than $100,000, except as provided in section 332.301.  The 
 commissioner may increase the required bond amount upon 30 days' 
 notice to the accelerated mortgage payment provider.  

    (c) If a bond is submitted, it must name as surety an 
 insurance company authorized to transact fidelity and surety 
 business in this state.  The bond must run to the state of 
 Minnesota for the use of the state and of any person who may 
 have a claim against the obligor arising out of the obligor's 
 activities as an accelerated mortgage payment provider.  The 
 bond must be conditioned that the obligor will not commit any 
 fraudulent act and will faithfully conform to and abide by the 
 provisions of accelerated mortgage payment agreements with 
 Minnesota residents.  

    If an accelerated mortgage payment provider has failed to 
 account to a mortgagor or distribute funds to the mortgagee as 
 required by an accelerated mortgage payment agreement, the 
 mortgagor or the mortgagor's legal representative or receiver or 
 the commissioner shall have, in addition to any other legal 
 remedies, a right of action in the name of the debtor on the 
 bond or the security given pursuant to this section. 

    HIST: 1994 c 638 s 2; 1999 c 151 s 46 

     332.301 Bond; background check. 

    The commissioner may accept an initial surety bond or 
 deposit in an amount less than $100,000 based upon the business 
 plan of the accelerated mortgage payment provider, provided the 
 commissioner obtains a third-party background check at the 
 expense of the accelerated mortgage payment provider and from a 
 source to be determined by the commissioner.  The commissioner 
 may require a third-party background check in connection with 
 any accelerated mortgage payment provider at the expense of the 
 accelerated mortgage payment provider, but no more often than 
 annually. 

    HIST: 1994 c 638 s 3 

     332.302 Contracts; notice to mortgagor. 

    A contract entered into between an accelerated mortgage 
 payment provider and a mortgagor shall be in writing and include 
 all applicable terms and conditions including, but not limited 
 to, all fees, costs, and charges.  A conforming copy must be 
 provided to the mortgagor before any fees in connection with the 
 accelerated mortgage payment services are received by the 
 accelerated mortgage payment provider.  A contract shall provide 
 that the arrangement between the accelerated mortgage payment 
 provider and lender or lenders requires: 

    (1) that if the original terms of the mortgage, mortgage 
 note, or escrow agreement are in default because of nonpayment 
 by the accelerated mortgage payment provider, the lender or 
 lenders mail or otherwise deliver to the mortgagor a written 
 notice within 30 days of the default; and 

    (2) that a written summary of payments received by the 
 accelerated mortgage payment provider by date and amount, 
 payments made to the lender or lenders on behalf of the 
 mortgagor by date and amount, and unremitted balance held by the 
 accelerated mortgage payment provider be provided to the 
 mortgagor at least annually or more frequently on a date or 
 dates mutually agreed upon between the accelerated mortgage 
 payment provider and mortgagor. 

    HIST: 1994 c 638 s 4 

     332.303 Segregated accounts. 

    A payment received by an accelerated mortgage payment 
 provider from or on behalf of a client shall be held by the 
 accelerated mortgage payment provider in a separate trust 
 account clearly designated for client funds.  The account shall 
 be in a bank or other depository institution authorized or 
 chartered under the laws of any state or of the United States.  
 The accelerated mortgage payment provider shall not commingle 
 funds held for payment to lenders with its own property or funds.

    HIST: 1994 c 638 s 5 

     332.31 Definitions. 

    Subdivision 1.    Terms.  The terms in this section for 
 the purposes of sections 332.31 to 332.45 shall have the 
 meanings given them.  

    Subd. 2.    Person.  "Person" means and includes 
 individuals, partnerships, associations or corporations.  

    Subd. 3.    Collection agency.  "Collection agency" 
 means and includes any person engaged in the business of 
 collection for others any account, bill or other indebtedness 
 except as hereinafter provided.  It includes persons who furnish 
 collection systems carrying a name which simulates the name of a 
 collection agency and who supply forms or form letters to be 
 used by the creditor, even though such forms direct the debtor 
 to make payments directly to the creditor rather than to such 
 fictitious agency.  

    Subd. 4. Repealed, 1979 c 144 s 7 

    Subd. 5. Repealed, 1979 c 144 s 7 

    Subd. 6.    Collector.  "Collector" is a person acting 
 under the authority of a collection agency under 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. 

    Subd. 7.    Exempt out-of-state collection agency.  
 "Exempt out-of-state collection agency" means a collection 
 agency that has no physical presence in this state, that is 
 engaged in the business of collecting claims on behalf of 
 creditors that have no physical presence in this state, and that 
 only conducts business within this state by means of interstate 
 communications including telephone, mail, and facsimile 
 transmission. 

    HIST: 1969 c 766 s 1; 1973 c 720 s 54 subd 2; 1987 c 37 s 1; 
 2000 c 389 s 1 

     332.311 Transfer of administrative functions. 

    The powers, duties, and responsibilities of the consumer 
 services section under sections 332.31 to 332.45 relating to 
 collection agencies are hereby transferred to and imposed upon 
 the commissioner of commerce.  

    HIST: 1973 c 720 s 54 subd 1; 1979 c 144 s 4; 1980 c 516 s 2; 
 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92 

     332.32 Exclusions. 

    The term "collection agency" shall not include persons 
 whose collection activities are confined to and are directly 
 related to the operation of a business other than that of a 
 collection agency such as, but not limited to banks when 
 collecting accounts owed to the banks and when the bank will 
 sustain any loss arising from uncollectible accounts, abstract 
 companies doing an escrow business, real estate brokers, public 
 officers, persons acting under order of a court, lawyers, trust 
 companies, insurance companies, credit unions, savings 
 associations, loan or finance companies unless they are engaged 
 in asserting, enforcing or prosecuting unsecured claims which 
 have been purchased from any person, firm, or association when 
 there is recourse to the seller for all or part of the claim if 
 the claim is not collected.  

    HIST: 1969 c 766 s 2; 1995 c 202 art 1 s 25 

     332.33 Licenses. 

    Subdivision 1.    Requirement.  Except as 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 collection agency license.  A person acting under the 
 authority of a collection agency, as a collector, must first 
 obtain a Minnesota collector license.  A licensed collector may 
 use one additional assumed name only if the assumed name is 
 registered with and approved by the commissioner. 

    Subd. 2.    Penalty.  A person who 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 carries on this business after the revocation, 
 suspension, or expiration of a license is guilty of a 
 misdemeanor. 

    Subd. 3.    Term.  Licenses issued or renewed by the 
 commissioner of commerce under sections 332.31 to 332.45 shall 
 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 is $500 and renewal as 
 collection agency is $400.  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 shall procure a license for each 
 place where the business is to be conducted.  

    Subd. 4.    Investigations.  The commissioner may 
 require financial statements and references of all applicants 
 for a license as the commissioner considers necessary.  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 
 the initial investigation, not to exceed $500, and for that 
 purpose may require a deposit against the cost of the 
 investigation as the commissioner considers adequate.  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 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 complies in form and substance 
 with sections 332.31 to 332.45 and the rules adopted under those 
 sections and the commissioner finds that the applicant is 
 qualified under sections 332.31 to 332.45, the commissioner 
 shall issue a license immediately.  If the application is not 
 sufficient in form or substance, the commissioner shall reject 
 it and notify the applicant of the manner in which it is 
 deficient.  The rejection is without prejudice to the filing of 
 a new application.  On finding that the applicant is not 
 qualified under sections 332.31 to 332.45, the commissioner 
 shall reject the application and shall give the applicant 
 written notice of the rejection and the reasons 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.  

    Subd. 7.    Notice.  A licensed collection agency or 
 individual collector must give the commissioner written notice 
 of a change in personal name, company name, address, or 
 ownership not later than 15 days after the change occurs. 

    HIST: 1969 c 399 s 1; 1969 c 766 s 3; 1971 c 23 s 22; 1971 c 
 576 s 1; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 1980 c 516 s 2; 
 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1985 c 248 s 70; 
 1986 c 444; 1987 c 37 s 2; 1987 c 358 s 118,119; 1997 c 222 s 
 50,51 

     332.335 Exemption from licensure. 

    Subdivision 1.    Requirements.  An exempt out-of-state 
 collection agency, as defined by section 332.31, subdivision 7, 
 that has obtained a certificate of exemption under subdivision 2 
 is exempt from the collector and collection agency licensing 
 requirements of this chapter, but is subject to all other 
 provisions of sections 45.027 and 332.31 to 332.45. 

    Subd. 2.    Certificate of exemption.  To qualify as an 
 exempt out-of-state collection agency, a person, except for 
 those excluded from the definition of collection agency under 
 section 332.32, must, before initiating collection activity, 
 obtain a certificate of exemption from the commissioner.  A 
 certificate of exemption must be issued upon the applicant's 
 filing an application on a form approved by the commissioner if 
 the applicant is found to be qualified under this chapter.  The 
 form must include: 

    (1) a signed statement that the exempt out-of-state 
 collection agency holds a valid license to do business as a 
 collection agency in another state whose requirements for 
 licensing are similar to the requirements imposed under this 
 chapter along with a copy of the licensing document from the 
 other state; 

    (2) certification that the exempt out-of-state collection 
 agency will not solicit or collect claims for any creditor who 
 has a business presence in this state.  A creditor has a 
 business presence in this state if either the creditor or an 
 affiliate or subsidiary of the creditor has an office in this 
 state; 

    (3) certification that the exempt out-of-state collection 
 agency will not establish a physical presence in this state and 
 that all collection activity in this state will be conducted 
 exclusively by means of interstate communications including 
 telephone, mail, or facsimile transmission; 

    (4) evidence of a corporate surety bond substantially 
 similar, as determined by the commissioner, to the bond required 
 under section 332.34; 

    (5) appointment of the commissioner as the exempt 
 out-of-state collection agency's agent for service of process in 
 this state; and 

    (6) written acknowledgment that the exempt out-of-state 
 collection agency agrees to be subject to the jurisdiction of 
 Minnesota courts and the Minnesota Administrative Procedures 
 Act, chapter 14, in connection with the commissioner's 
 enforcement of Minnesota law pertaining to collection activities 
 in Minnesota, including compliance with this chapter and chapter 
 45. 

    Subd. 3.    Notice.  An exempt out-of-state collection 
 agency must advise the commissioner of any material changes to 
 the information submitted in the most recent application within 
 ten days of the change. 

    Subd. 4.    Loss of exemption.  In addition to fines and 
 other authorized sanctions, a certificate of exemption is 
 considered revoked if the exempt out-of-state collection agency 
 is found to be in violation of any provision of chapter 45 or 
 332, or the Fair Debt Collection Practices Act of 1977, United 
 States Code, title 15, sections 1691 to 1693r. 

    HIST: 2000 c 389 s 2 

     332.34 Bond. 

    The commissioner of commerce shall require each collection 
 agency licensee to annually file and maintain in force a 
 corporate surety bond, in a form to be prescribed by, and 
 acceptable to, the commissioner, and in a sum of at least 
 $20,000.  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. 

    HIST: 1969 c 766 s 4; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1981 c 229 s 1; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92; 1986 c 444; 1987 c 37 s 3; 1996 c 439 art 1 s 
 16; 1997 c 222 s 52 

     332.35 Prior conviction or judgment as disqualification. 

    No license shall be issued to any person, firm, corporation 
 or association who or which, or any of the officers of which 
 have, within the past five years, been convicted in any court of 
 fraud or any felony or have been convicted of or had judgment 
 entered against them in any court for failure to account to a 
 client or customer for money or property collected by them for 
 the client or customer.  No license shall be issued to any 
 attorney whose license to practice law has been suspended or 
 revoked, for a period of five years after the date of such 
 suspension or revocation.  

    HIST: 1969 c 766 s 5 

     332.355 Agency responsibility for collectors. 

    The commissioner may take action against a collection 
 agency for any violations of debt collection laws by its debt 
 collectors.  The commissioner may also take action against the 
 debt collectors themselves for these same violations. 

    HIST: 2000 c 483 s 51 

  332.36 Repealed, 1975 c 61 s 26 

     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; 

    (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; 

    (14) in collection letters or publications, or in any 
 communication, oral or written, imply or suggest that health 
 care services will be withheld in an emergency situation; 

    (15) when a debtor has a listed telephone number, enlist 
 the aid of a neighbor or third party to request that the debtor 
 contact the licensee, except a person who resides with the 
 debtor or a third party with whom the debtor has authorized the 
 licensee to place the request.  This clause does not apply to a 
 call back message left at the debtor's place of employment which 
 is limited to the licensee's telephone and the collector's name; 

    (16) when attempting to collect a debt, fail to provide the 
 debtor with the full name of the collection agency as it appears 
 on its license; 

    (17) collect any money from a debtor that is not reported 
 to a creditor or fail to return any amount of overpayment from a 
 debtor to the debtor or to the state of Minnesota pursuant to 
 the requirements of chapter 345; 

    (18) accept currency or coin as payment for a debt without 
 issuing an original receipt to the debtor and maintain a 
 duplicate receipt in the debtor's payment records; 

    (19) attempt to collect any amount of money from a debtor 
 or charge a fee to a creditor that is not authorized by 
 agreement with the client; 

    (20) falsify any collection agency documents with the 
 intent to deceive a debtor, creditor, or governmental agency; or 

    (21) when initially contacting a Minnesota debtor by mail, 
 fail to include a disclosure on the contact notice, in a type 
 size or font which is equal to or larger than the largest other 
 type of type size or font used in the text of the notice.  The 
 disclosure must state:  "This collection agency is licensed by 
 the Minnesota Department of Commerce." 

    HIST: 1969 c 766 s 7; 1981 c 229 s 2; 1987 c 37 s 4; 1988 c 
 592 s 12; 1993 c 295 s 1; 1999 c 137 s 10 

     332.38 Application in case of pretended purchase, 
  assignment or use of a fictitious name.  

    The provisions of sections 332.31 to 332.45 shall apply to 
 any person who, by any device, subterfuge or pretense, makes a 
 pretended purchase or takes a pretended assignment of accounts 
 from another for the purpose of evading provisions of sections 
 332.31 to 332.45, or, uses a fictitious name or any name other 
 than the person's own name which would indicate to the debtor 
 that a third person is collecting or attempting to collect such 
 account or claim.  

    HIST: 1969 c 766 s 8; 1986 c 444 

     332.385 Notification to commissioner. 

    The collection agency licensee shall notify the 
 commissioner of any employee termination within ten days of the 
 termination if it is in whole or in part based on a violation of 
 this chapter. 

    HIST: 1993 c 295 s 2 

     332.39 Injunctions.  

    The attorney general or the county attorney of any county 
 may apply for an injunction in district court to enjoin any 
 violations of sections 332.31 to 332.45, or any practices 
 prohibited in section 332.37, and any such court may issue 
 temporary or permanent injunctions as the circumstances shall 
 require.  Such injunctive proceedings shall be in addition to 
 and not in lieu of penalties and remedies otherwise provided in 
 sections 332.31 to 332.45.  

    HIST: 1969 c 766 s 9 

     332.395 Commissioner's power over ineffective licenses. 

    If a license lapses, is surrendered, withdrawn, terminated, 
 or otherwise becomes ineffective, the commissioner of commerce 
 may do either or both of the following:  (1) institute a 
 proceeding under section 45.027 within two years after the 
 license was last effective and enter a revocation or suspension 
 order as of the last date on which the license was in effect; 
 (2) impose a civil penalty as provided for in section 45.027, 
 subdivision 6. 

    HIST: 1996 c 439 art 1 s 17 

     332.40 Investigation, suspension and revocation of 
  licenses. 

    Subdivision 1.    Examination of licensee's records.  
 The commissioner of commerce may make examinations of the 
 collection records of a licensee at a reasonable time and in a 
 scope as is necessary to enforce the provisions of sections 
 332.31 to 332.45 and for that purpose the commissioner shall 
 have free access to the books and records of a licensee relating 
 thereto.  If a licensee violates any provision of sections 
 332.31 to 332.45, or any administrative rules issued pursuant to 
 sections 332.31 to 332.45, fails to maintain its financial 
 condition sufficient to qualify for a license on an original 
 application, or, fails to maintain its registration or comply 
 with all of the requirements of Minnesota Statutes 1967, chapter 
 303, the commissioner may, after notice and hearing in 
 accordance with the provisions of the laws of this state 
 governing proceedings before administrative agencies, revoke a 
 license or suspend a license for a period as the commissioner 
 may deem proper. 

    Subd. 2.    Other examinations.  The commissioner may 
 investigate within or without this state as the commissioner 
 deems necessary to determine whether any person has violated any 
 provision of the Fair Debt Collection Practices Act of 1977, or 
 of sections 332.31 to 332.45, or any rule or order thereunder; 
 to determine whether a license should be issued, renewed, or 
 revoked; to aid in the enforcement of sections 332.31 to 332.45; 
 or in prescribing rules and forms thereunder.  The commissioner 
 may publish information concerning any violation of sections 
 332.31 to 332.45 or any rule or order thereunder.  

    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. 

    Subd. 4.    Court order to compel disclosures.  In case 
 of contumacy by or refusal to obey a subpoena by any person the 
 district court upon application by the commissioner may issue to 
 the person an order directing the person to appear before the 
 commissioner or commissioner's designee to produce documentary 
 evidence if so ordered or to give evidence touching the matter 
 under investigation or in question.  Failure to obey the order 
 of the court may be punished by the court as a contempt of court.

    HIST: 1969 c 766 s 10; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1981 c 229 s 3; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92; 1986 c 444; 1987 c 37 s 5 

     332.41 Appeals. 

    Appeal from a denial, suspension, revocation, or censure of 
 a license must be made according to chapter 14. 

    HIST: 1969 c 766 s 11; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 
 2001 c 208 s 24 

     332.42 Reports and records.  

    Subdivision 1.    Verified financial statement.  The 
 commissioner of commerce may at any time require a licensee to 
 submit a verified financial statement for examination by the 
 commissioner to determine whether the licensee is financially 
 responsible to carry on a collection agency business within the 
 intents and purposes of sections 332.31 to 332.45.  

    Subd. 2.    Recordkeeping.  The commissioner shall 
 require the licensee to keep such books and records in the 
 licensee's place of business in this state as will enable the 
 commissioner to determine whether there has been compliance with 
 the provisions of sections 332.31 to 332.45, unless the agency 
 is a foreign corporation duly authorized, admitted and licensed 
 to do business in this state and complies with all the 
 requirements of Minnesota Statutes 1967, chapter 303 and with 
 all other requirements of sections 332.31 to 332.45.  Every 
 licensee shall preserve the records of final entry used in such 
 business for a period of five years after final remittance is 
 made on any amount placed with licensee for collection or after 
 any account has been returned to the claimant on which one or 
 more payments have been made.  

    HIST: 1969 c 766 s 12; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 
 1986 c 444 

     332.43 Delinquent collection agencies. 

    Subdivision 1.  If the commissioner shall determine that a 
 licensee is insolvent or has collected accounts but has failed 
 to remit money due to any claimant within 45 days from the end 
 of the month in which collection was made, or when the license 
 of a collection agency has expired or terminated for any reason 
 whatsoever, the commissioner, on determining such action 
 necessary to protect the public interest, may apply to the 
 district court for the county in which the main office of such 
 agency is located for appointment of a receiver to receive the 
 assets of the licensee for the purpose of liquidating or 
 rehabilitating its business and or for such other relief as the 
 nature of the case and the interest of the claimants may 
 require.  The reasonable and necessary expenses of the 
 receivership shall constitute the first claim on the bond.  

    Subd. 2. Repealed, 1979 c 144 s 7 

    Subd. 3. Repealed, 1979 c 144 s 7 

    HIST: 1969 c 766 s 13; 1973 c 720 s 54 subd 2; 1979 c 144 s 5; 
 1986 c 444 

     332.44 Rulemaking power.  

    The commissioner of commerce shall make and file in 
 accordance with the provisions of chapter 14, all reasonable 
 rules as shall be necessary for the administration of sections 
 332.31 to 332.45.  

    HIST: 1969 c 766 s 14; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1982 c 424 s 130; 1983 c 289 s 114 subd 1; 1984 
 c 655 art 1 s 92; 1985 c 248 s 70 

     332.45 Liability of sureties.  

    Sureties for collection agencies who have executed bonds 
 pursuant to Minnesota Statutes 1967, sections 332.01 to 332.03 
 shall not be liable for any new liabilities incurred by the 
 collection agency after the commissioner of commerce has 
 approved that agency's bond as required by section 332.34.  

    HIST: 1969 c 766 s 15; 1973 c 720 s 54 subd 2; 1979 c 144 s 6; 
 1980 c 516 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92 

     332.50 Issuance of worthless check. 

    Subdivision 1.    Definitions.  (a) The definitions 
 provided in this subdivision apply to this section. 

    (b) "Check" means a check, draft, order of withdrawal, or 
 similar negotiable or nonnegotiable instrument.  

    (c) "Credit" means an arrangement or understanding with the 
 drawee for the payment of the check. 

    (d) "Dishonor" has the meaning given in section 336.3-502, 
 but does not include dishonor due to a stop payment order 
 requested by an issuer who has a good faith defense to payment 
 on the check.  "Dishonor" does include a stop payment order 
 requested by an issuer if the account did not have sufficient 
 funds for payment of the check at the time of presentment, 
 except for stop payment orders on a check found to be stolen.  

    (e) "Payee" or "holder" includes an agent of the payee or 
 holder. 

    Subd. 2.    Acts constituting.  Whoever issues any check 
 that is dishonored is liable for the following penalties: 

    (a) A service charge, not to exceed $30, may be imposed 
 immediately on any dishonored check by the payee or holder of 
 the check, regardless of mailing a notice of dishonor, if notice 
 of the service charge was conspicuously displayed on the 
 premises when the check was issued.  Only one service charge may 
 be imposed under this paragraph for each dishonored check.  The 
 displayed notice must also include a provision notifying the 
 issuer of the check that civil penalties may be imposed for 
 nonpayment. 

    (b) If the amount of the dishonored check is not paid 
 within 30 days after the payee or holder has mailed notice of 
 dishonor pursuant to section 609.535 and a description of the 
 penalties contained in this subdivision, whoever issued the 
 dishonored check is liable to the payee or holder of the check 
 for: 

    (1) the amount of the check, the service charge as provided 
 in paragraph (a), plus a civil penalty of up to $100 or the 
 value of the check, whichever is greater.  In determining the 
 amount of the penalty, the court shall consider the amount of 
 the check and the reason for nonpayment.  The civil penalty may 
 not be imposed until 30 days following the mailing of the notice 
 of dishonor.  A payee or holder of the check may make a written 
 demand for payment of the civil liability by sending a copy of 
 this section and a description of the liability contained in 
 this section to the issuer's last known address.  Notice as 
 provided in paragraph (a) must also include notification that 
 additional civil penalties will be imposed for dishonored checks 
 for nonpayment after 30 days; 

    (2) interest at the rate payable on judgments pursuant to 
 section 549.09 on the face amount of the check from the date of 
 dishonor; and 

    (3) reasonable attorney fees if the aggregate amount of 
 dishonored checks issued by the issuer to all payees within a 
 six-month period is over $1,250. 

    (c) This subdivision prevails over any provision of law 
 limiting, prohibiting, or otherwise regulating service charges 
 authorized by this subdivision, but does not nullify charges for 
 dishonored checks, which do not exceed the charges in paragraph 
 (a) or terms or conditions for imposing the charges which have 
 been agreed to by the parties in an express contract. 

    (d) A sight draft may not be used as a means of collecting 
 the civil penalties provided in this section without prior 
 consent of the issuer. 

    (e) The issuer of a dishonored check is not liable for the 
 penalties described in paragraph (b) if a pretrial diversion 
 program under section 628.69 has been established in the 
 jurisdiction where the dishonored check was issued, the issuer 
 was accepted into the program, and the issuer successfully 
 completes the program. 

    Subd. 3.    Notice of dishonor required.  Notice of 
 nonpayment or dishonor that includes a citation to this section 
 and section 609.535, and a description of the penalties 
 contained in these sections, shall be sent by the payee or 
 holder of the check to the drawer by certified mail, return 
 receipt requested, or by regular mail, supported by an affidavit 
 of service by mailing, to the address printed or written on the 
 check. 

    The issuance of a check with an address printed or written 
 on it is a representation by the drawer that the address is the 
 correct address for receipt of mail concerning the check.  
 Failure of the drawer to receive a regular or certified mail 
 notice sent to that address is not a defense to liability under 
 this section, if the drawer has had actual notice for 30 days 
 that the check has been dishonored.  

    An affidavit of service by mailing shall be retained by the 
 payee or holder of the check.  

    Subd. 4.    Proof of identity.  The check is prima facie 
 evidence of the identity of the issuer if the person receiving 
 the check:  

    (a) records the following information about the issuer on 
 the check, unless it is printed on the face of the check:  

    (1) name; 

    (2) home or work address; 

    (3) home or work telephone number; and 

    (4) identification number issued pursuant to section 
 171.07; 

    (b) compares the issuer's physical appearance, signature, 
 and the personal information recorded on the check with the 
 issuer's identification card issued pursuant to section 171.07; 
 and 

    (c) initials the check to indicate compliance with these 
 requirements.  

    Subd. 5.    Defenses.  Any defense otherwise available 
 to the issuer also applies to liability under this section. 

    HIST: 1983 c 225 s 6; 1984 c 576 s 26; 1985 c 140 s 1,2; 1991 
 c 256 s 8,9; 1992 c 565 s 113; 1996 c 414 art 1 s 41; 1997 c 157 
 s 65,66; 1999 c 218 s 1; 2001 c 204 s 1 

     332.505 Civil liability for receiving motor fuel without 
  paying. 

    Subdivision 1.    Definitions.  For purposes of this 
 section: 

    (1) "motor fuel" means a liquid, regardless of its 
 properties, used to propel a vehicle; 

    (2) "retailer" means a person that sells motor fuel at 
 retail; and 

    (3) "vehicle" means a motor vehicle or watercraft that is 
 self-propelled and that uses motor fuel for propulsion. 

    Subd. 2.    Acts constituting.  (a) The owner of a 
 vehicle that receives motor fuel that was not paid for is liable 
 to the retailer for the price of the motor fuel received and a 
 service charge of up to $20, or the actual costs of collection 
 not to exceed $30.  This charge may be imposed upon the mailing 
 of the notice under subdivision 3, if notice of the service 
 charge was conspicuously displayed on the premises from which 
 the motor fuel was received.  The notice must include a 
 statement that civil penalties will be imposed if payment is not 
 received within 30 days.  Only one service charge may be imposed 
 under this paragraph for each incident. 

    (b) If the price of the motor fuel received is not paid 
 within 30 days after the retailer has mailed notice under 
 subdivision 3, the owner is liable to the retailer for the price 
 of the motor fuel received, the service charge as provided in 
 paragraph (a), plus a civil penalty not to exceed $100 or the 
 price of the motor fuel, whichever is greater.  The civil 
 penalty may not be imposed until 30 days after the mailing of 
 the notice under subdivision 3.  

    Subd. 3.    Notice of nonpayment.  Notice of nonpayment 
 that includes a citation to this section and a description of 
 the penalties contained in it shall be sent by the retailer to 
 the owner by regular mail, supported by an affidavit of service 
 by mailing, to the address indicated by records on the vehicle 
 under section 86B.401 or 168.346.  The notice must include a 
 signed statement by the employee who reported the act describing 
 what the employee observed and the license number of the motor 
 vehicle, if known.  Failure of the owner to receive a notice is 
 not a defense to liability under this section. 

    An affidavit of service by mailing must be retained by the 
 retailer. 

    Subd. 4.    Notice of dispute.  If, within the 30-day 
 period referred to in subdivision 2, paragraph (b), the owner 
 sends written notice to the retailer disputing the retailer's 
 claim that the owner received motor fuel from the retailer 
 without paying for it, the retailer may collect the price of the 
 motor fuel and the civil penalties imposed by this section only 
 pursuant to a judgment rendered by a court of competent 
 jurisdiction. 

    Upon receipt of the notice, the retailer shall cease all 
 collection efforts.  

    HIST: 2001 c 204 s 2 

     332.51 Civil liability for theft. 

    Subdivision 1.    Liability for theft of property.  A 
 person who steals personal property from another is civilly 
 liable to the owner of the property for its value when stolen 
 plus punitive damages of either $50 or up to 100 percent of its 
 value when stolen, whichever is greater.  If the property is 
 merchandise stolen from a retail store, its value is the retail 
 price of the merchandise in the store when the theft occurred. 

    Subd. 2.    Notice.  In order to recover under 
 subdivision 1 for the theft of a shopping cart, a store must 
 have posted at the time of the theft a conspicuous notice 
 describing the liability under subdivision 1. 

    Subd. 3.    Liability of parent or guardian.  Section 
 540.18 applies to this section, except that recovery is not 
 limited to special damages.  

    Subd. 4.    Criminal action.  The filing of a criminal 
 complaint, conviction, or guilty plea is not a prerequisite to 
 liability under this section.  Payment or nonpayment may not be 
 used as evidence in a criminal action. 

    Subd. 5.    Recovery of property.  The recovery of 
 stolen property by a person does not affect liability under this 
 section, other than liability for the value of the property. 

    Subd. 6.    Right to demand payment.  A person may make 
 a written demand for payment for the liability imposed by this 
 section before beginning an action, including a copy of this 
 section and a description of the liability contained in this 
 section. 

    HIST: 1988 c 481 s 1; 1989 c 224 s 2; 1989 c 262 s 4 

     332.52 Definitions. 

    Subdivision 1.    Applicability.  The definitions in 
 this section apply to sections 332.52 to 332.60. 

    Subd. 2.    Buyer.  "Buyer" means any individual who is 
 solicited to purchase or who purchases the services of a credit 
 services organization. 

    Subd. 3.    Credit services organization.  (a) "Credit 
 services organization" means any person that, with respect to 
 the extension of credit by others, sells, provides, performs, or 
 represents that the person will sell, provide, or perform, in 
 return for the payment of money or other valuable consideration, 
 any of the following services: 

    (1) improve a buyer's credit record, history, or rating; 

    (2) obtain an extension of credit for a buyer; or 

    (3) provide advice or assistance to a buyer with regard to 
 either clause (1) or (2). 

    (b) "Credit services organization" does not include: 

    (1) any person authorized to make loans or extensions of 
 credit under the laws of this state or the United States, if the 
 person is subject to regulation and supervision by this state or 
 the United States or a lender approved by the United States 
 Secretary of Housing and Urban Development for participation in 
 any mortgage insurance program under the National Housing Act; 

    (2) any bank, savings bank, or savings and loan institution 
 whose deposits or accounts are eligible for insurance by the 
 Federal Deposit Insurance Corporation or a subsidiary of the 
 bank, savings bank, or savings and loan institution; 

    (3) any credit union, federal credit union, or out-of-state 
 credit union doing business in this state; 

    (4) any nonprofit organization exempt from taxation under 
 section 501(c)(3) of the Internal Revenue Code of 1986, as 
 amended through December 31, 1990; 

    (5) any person licensed as a prorating agency under the 
 laws of this state if the person is acting within the course and 
 scope of that license; 

    (6) any person licensed as a real estate broker by this 
 state if the person is acting within the course and scope of 
 that license; 

    (7) any person licensed as a collection agency under the 
 laws of this state if the person is acting within the course and 
 scope of that license; 

    (8) any person licensed to practice law in this state if 
 the person renders services within the course and scope of 
 practice as an attorney; 

    (9) any broker-dealer registered with the Securities and 
 Exchange Commission or the Commodity Futures Trading Commission 
 if the broker-dealer is acting within the course and scope of 
 that regulation; or 

    (10) any consumer reporting agency as defined in the 
 federal Fair Credit Reporting Act, United States Code, title 15, 
 sections 1681 to 1681t, as amended through December 31, 1990. 

    Subd. 4.    Extension of credit.  "Extension of credit" 
 means the right, offered or granted primarily for personal, 
 family, or household purposes, to defer payment of debt or to 
 incur debt and defer its payment. 

    HIST: 1991 c 314 s 1 

     332.53 Waiver of rights. 

    Any waiver by a buyer of sections 332.52 to 332.60 is 
 void.  Any attempt by a credit services organization to have a 
 buyer waive rights provided under sections 332.52 to 332.60 is a 
 violation of sections 332.52 to 332.60.  In any proceeding 
 involving sections 332.52 to 332.60, the burden of proving an 
 exemption or an exception from a definition is upon the person 
 claiming it. 

    HIST: 1991 c 314 s 2 

     332.54 Registration. 

    Subdivision 1.    Filing.  It is unlawful for any credit 
 services organization to offer, advertise, or execute or cause 
 to be executed by a consumer any contract in this state unless 
 the credit services organization at the time of the offer, 
 advertisement, sale, or execution of a contract has been 
 properly registered with the commissioner.  

    Subd. 2.    Disclosure.  The registration must contain 
 the following information: 

    (1) the name and address of the credit services 
 organization; 

    (2) the name and address of the registered agent authorized 
 to accept service of process on behalf of the credit services 
 organization; 

    (3) the name and address of any person who directly or 
 indirectly owns or controls a ten percent or greater interest in 
 the credit services organization; 

    (4) the name and address of the surety company that issued 
 the bond required under section 332.55; and 

    (5) full disclosure of any litigation or unresolved 
 complaint filed within the preceding five years with the state, 
 any other state, or the United States relating to the operation 
 of the credit services organization, or a notarized statement 
 that there has been no litigation or unresolved complaint filed 
 within the preceding five years with the state, any other state, 
 or the United States relating to the operation of the credit 
 services organization. 

    Subd. 3.    Additional information.  The credit services 
 organization must attach to the registration statement a copy of 
 the contract which the credit services organization intends to 
 execute with its consumers and evidence of the required bond. 

    Subd. 4.    Update of information.  The credit services 
 organization must update the registration statement required 
 under this section not later than 90 days after the date from 
 which a change in the information required in the statement 
 occurs. 

    Subd. 5.    Buyer inspection.  Each credit services 
 organization registering under this section must maintain a copy 
 of the registration statement in its files.  The credit services 
 organization must allow a buyer to inspect the registration 
 statement on request. 

    Subd. 6.    Term.  Registration issued or renewed by the 
 commissioner of commerce under sections 332.52 to 332.60 expires 
 on June 30 of each year. 

    Subd. 7.    Fees.  The fee for a credit services 
 organization's registration is $100 for issuance or renewal for 
 each location of business. 

    HIST: 1991 c 314 s 3; 1993 c 295 s 3-5 

     332.55 Bond. 

    A credit services organization must submit to the 
 commissioner at the time of registration, an annual surety bond 
 of $10,000, expiring on June 30 of each year, by an insurance 
 company which is authorized by the state of Minnesota to 
 transact the business of fidelity and surety insurance.  The 
 credit services organization must be the obligor.  The bond must 
 benefit the state of Minnesota and any person who may have a 
 cause of action against the obligor arising out of the obligor's 
 activities as a credit services organization.  The commissioner 
 may accept a deposit in cash, or securities that may be legally 
 purchased by savings banks or for trust funds of an aggregate 
 market value equal to the bond requirement, in lieu of the 
 surety bond.  The cash or securities must be deposited with the 
 state treasurer. 

    HIST: 1991 c 314 s 4; 1992 c 564 art 4 s 16; 1993 c 295 s 6 

     332.56 Prohibited acts. 

    Subdivision 1.    Requirements; prohibitions.  A credit 
 services organization, its salespersons, agents, and 
 representatives, and independent contractors who sell or attempt 
 to sell the services of a credit services organization may not 
 do any of the following: 

    (1) charge or receive any money or other valuable 
 consideration prior to full and complete performance of the 
 services the credit services organization has agreed to perform 
 for the buyer; 

    (2) charge or receive any money or other valuable 
 consideration solely for referral of the buyer to a retail 
 seller who will or may extend credit to the buyer if the credit 
 that is or will be extended to the buyer is upon substantially 
 the same terms as those available to the general public; 

    (3) make, counsel, or advise any buyer to make, any 
 statement with respect to a buyer's credit worthiness, credit 
 standing, or credit capacity that is untrue or misleading or 
 that should be known by the exercise of reasonable care to be 
 untrue or misleading to a credit reporting agency or to any 
 person who has extended credit to a buyer or to whom a buyer is 
 applying for an extension of credit; or 

    (4) make or use any untrue or misleading representations in 
 the offer or sale of the services of a credit services 
 organization or engage, directly or indirectly, in any act, 
 practice, or course of business that operates or would operate 
 as fraud or deception upon any person in connection with the 
 offer or sale of the services of a credit services organization. 

    Subd. 2.    Salespersons; agents.  If a credit services 
 organization is in compliance with subdivision 1, clause (1), 
 the salesperson, agent, or representative who sells the services 
 of that organization is not required to obtain a surety bond. 

    HIST: 1991 c 314 s 5 

     332.57 Disclosure statement. 

    Subdivision 1.    Requirement.  Before the execution of 
 a contract or agreement between the buyer and a credit services 
 organization or before the receipt by the credit services 
 organization of any money or other valuable consideration, 
 whichever occurs first, the credit services organization shall 
 provide the buyer with a statement in writing containing all of 
 the information required by subdivision 2.  The credit services 
 organization shall maintain on file for a period of two years an 
 exact copy of the statement, personally signed by the buyer, 
 acknowledging receipt of a copy of the statement. 

    Subd. 2.    Contents.  The disclosure statement required 
 under subdivision 1 must be printed in boldface and in at least 
 10-point type and must include the following statement: 

   "CONSUMER CREDIT FILE RIGHTS UNDER MINNESOTA AND FEDERAL LAW

    You have a right to obtain a copy of your credit report 
 from a credit bureau.  You may be charged a reasonable fee.  
 There is no fee, however, if you have been turned down for 
 credit, employment, insurance, or a rental dwelling because of 
 information in your credit report within the preceding 30 days.  
 The credit bureau must provide someone to help you interpret the 
 information in your credit file. 

    You have a right to dispute inaccurate information by 
 contacting the credit bureau directly.  However, neither you nor 
 any "credit repair" company or credit services organization has 
 the right to have accurate, current, and verifiable information 
 removed from your credit bureau report.  Under the federal Fair 
 Credit Reporting Act, the credit bureau must remove accurate, 
 negative information from your report only if it is over seven 
 years old.  Bankruptcy can be reported for ten years. 

    You have a right to sue a credit repair company that 
 violates Minnesota's Credit Services Organization Act.  This law 
 prohibits deceptive practices by credit repair companies and 
 gives you a right to cancel your contract for any reason within 
 five working days from the date you signed it. 

    Credit bureaus are required to follow reasonable procedures 
 to ensure that creditors report information accurately.  
 However, mistakes may occur. 

    You may, on your own, notify a credit bureau in writing 
 that you dispute the accuracy of information in your credit 
 file.  The credit bureau must then reinvestigate and modify or 
 remove inaccurate information.  The credit bureau may not charge 
 any fee for this service.  Any pertinent information and copies 
 of any documents you have concerning an error should be given to 
 the credit bureau. 

    If reinvestigation does not resolve the dispute to your 
 satisfaction, you may send a brief statement to the credit 
 bureau to keep in your file, explaining why you think the record 
 is inaccurate.  The credit bureau must include your statement 
 about disputed information with any reports it issues about you."

    HIST: 1991 c 314 s 6 

     332.58 Contract. 

    Subdivision 1.    Requirements.  Each contract between 
 the buyer and a credit services organization for the purchase of 
 the services of the credit services organization must be in 
 writing, dated, and signed by the buyer and must include the 
 following: 

    (1) a conspicuous statement in boldface type, in immediate 
 proximity to the space reserved for the signature of the buyer, 
 as follows:  "If you, the buyer, have been denied credit within 
 the last 30 days, you may obtain a free copy of the consumer 
 credit report from the consumer reporting agency.  You also have 
 the right to dispute inaccurate information in a report.  You 
 may cancel this contract at any time prior to midnight of the 
 fifth day after the date of the transaction.  See the attached 
 notice of cancellation form for an explanation of this right"; 

    (2) the terms and conditions of payment, including the 
 total of all payments to be made by the buyer, whether to the 
 credit services organization or to some other person; 

    (3) a full and detailed description of the services to be 
 performed by the credit services organization for the buyer, 
 including all guarantees and all promises of full or partial 
 refunds, and the estimated date by which the services are to be 
 performed or the estimated length of time for performing the 
 services; 

    (4) the credit services organization's principal business 
 address and the name and address of its agent in this state 
 authorized to receive service of process; and 

    (5) with respect to the previous calendar year or the time 
 period the credit services organization has been in business, 
 whichever is shorter, the percentage of the credit services 
 organization's customers for whom the credit services 
 organization has fully and completely performed the services the 
 credit services organization agreed to perform for the buyer. 

    Subd. 2.    Notice of cancellation.  The contract must 
 be accompanied by a completed form in duplicate, captioned 
 "Notice of Cancellation" that must be attached to the contract, 
 is easily detachable, and contains in boldface type the 
 following statement written in the same language as used in the 
 contract: 

                     "Notice of Cancellation

    You may cancel this contract without any penalty or 
 obligation within five days from the date the contract is signed.

    If you cancel this contract, any payment made by you under 
 this contract will be returned within ten days following receipt 
 by the seller of your cancellation notice. 

    To cancel this contract, mail or deliver a signed dated 
 copy of this cancellation notice, or any other written notice to 
 ......(name of seller)...... at ......(address of seller)......, 
 ......(place of business)...... not later than midnight 
 ......(date)...... 

 I hereby cancel this transaction, 

 ......(date)...... 

 ...(purchaser's signature)..." 

    Subd. 3.    Buyer's copy.  The credit services 
 organization shall give to the buyer a copy of the completed 
 contract and all other documents the credit services 
 organization requires the buyer to sign at the time that they 
 are signed. 

    HIST: 1991 c 314 s 7 

     332.59 Violations. 

    Any person who violates sections 332.52 to 332.58 is guilty 
 of a misdemeanor.  A violation of sections 332.52 to 332.58 is a 
 violation of section 325F.69, subdivision 1, and the provisions 
 of section 8.31 apply.  Sections 332.52 to 332.58 do not limit 
 or restrict the right of any person to pursue any appropriate 
 remedy for a violation of sections 332.52 to 332.58.  The 
 provisions of section 45.027 apply to the enforcement of 
 sections 332.52 to 332.58. 

    HIST: 1991 c 314 s 8; 1993 c 295 s 7 

     332.60 Damages. 

    A buyer suffering damages as a result of a violation of 
 sections 332.52 to 332.58 by a credit services organization may 
 bring an action for recovery of damages.  Judgment must be 
 entered for actual damages, but in no case shall the amount be 
 less than the amount paid by the buyer to the credit services 
 organization, plus reasonable attorney fees and costs.  An award 
 may also be entered for punitive damages.  The remedies provided 
 under sections 332.52 to 332.60 are in addition to any other 
 procedures or remedies for any violation or conduct otherwise 
 provided by law. 

    HIST: 1991 c 314 s 9