Fair Debt Settlement

Civil Code Division 3, Part 4, Title 1.6C.17 deals with fair debt settlement practices in California. Chapter 1 contains general provisions. Section 1788.300 names this title the Fair Debt Settlement Practices Act.

Section 1788.301 defines the terms “debt settlement provider,” “debt settlement services,” “settlement account,” “consumer,” “person,” “creditor,” “debt,” “payment processor,” and “payment processing services.”

Section 1788.302 prohibits a debt settlement provider from engaging in false, deceptive, or misleading acts or practices when providing debt settlement services. Without limiting the general application of the foregoing, an act or practice is false, deceptive, or misleading, in connection with providing debt settlement services, if the act or practice consists of any of the three specified actions.

A debt settlement provider is required to provide to the consumer the specified disclosures along with an unsigned copy of the written contract proposed to be entered into between the debt settlement provider and the consumer no less than three calendar days prior to the execution of that contract by the consumer. A fully executed copy of the contract must be delivered to the consumer by the debt settlement provider immediately after the debt settlement provider receives the contract. Each contract between a consumer and debt settlement provider has to contain specified items.