Louisiana

• 3573.1.  Short title; purpose

​​http://legis.la.gov/legis/Law.aspx?p=y&d=107702 

1. This Part shall be known and may be cited as the “Credit Repair Services Organizations Act”.
2. The Legislature of Louisiana recognizes the right of the citizens of the state to utilize the services of qualified credit repair organizations for advice and assistance in improving their credit matters.  The Legislature of Louisiana does hereby declare that it is in the best interest of the citizens of the state to protect consumers in their efforts to improve their credit record, history, and rating.  The purpose of this Part is to promote the safety and welfare of the people of this state by providing a statutory structure in an area in which unqualified or unscrupulous individuals may injure or mislead the public.

• 3573.2.  Definitions; exemptions

http://legis.la.gov/legis/Law.aspx?d=107710 

1. As used in this Part, the following terms shall have the following meanings:

(1)  “Buyer” means an individual who is solicited to purchase or who purchases the services of a credit repair services organization.

(2)  “Consumer reporting agency” shall have the meaning assigned by Section 603(f), Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.).

(3)  “Credit repair services organization” means a person who, with respect to a buyer, in return for the payment of money or other valuable consideration, directly or indirectly, provides or represents that he can or will, directly or indirectly, provide any of the following services:

(a)  Improving a buyer’s credit record, history, or rating.

(b)  Advice or assistance to a buyer with regard to improving a buyer’s credit record, history, or rating, including the sale of a self-help instructional guide.

(4)  “Person” means an individual, corporation, partnership, trust, association, joint venture pool, syndicate, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein.

1. The following are exempt from this Part:

(1)  Repealed by Acts 2004, No. 79, §2, eff. May 28, 2004.

(2)  A licensed lender or other person authorized to make or broker loans or extensions of credit under the laws of this state or the United States who 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 a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.), provided the credit repair service is in connection with a loan and no additional fee is charged.

(3)  A bank or savings association whose deposits or accounts are federally insured or a wholly-owned subsidiary of such a bank or savings association.

(4)  A credit union doing business in this state.

(5)  A person licensed to practice law in this state while acting within the course and scope of the person’s practice as an attorney, and when such attorney is not actively and principally engaged as a credit repair services organization and such attorney’s credit repair services are ancillary to the providing of other legal services.  The exemption provided for in this Paragraph does not apply when an attorney is paid a fee by a client solely for the purposes of providing services, directly or indirectly, as a credit repair services organization as defined in Paragraph(A)(4) of this Section.

(6)  A consumer reporting agency.

(7)  Certified public accountants licensed to practice their profession in the state of Louisiana, while acting within the course and scope of their practice as a certified public accountant, and when such certified public accountant is not actively and principally engaged as a credit repair services organization and such certified public accountant’s credit repair services are ancillary to the providing of other accounting services.  The exemption provided for in this Paragraph does not apply when a certified public accountant is paid a fee by a client solely for the purposes of providing services, directly or indirectly, as a credit repair services organization defined in Paragraph(A)(4) of this Section.

• 3573.3.  Prohibited conduct

http://legis.la.gov/legis/Law.aspx?d=107711 

A credit repair services organization or a salesperson, agent, or representative of a credit repair services organization, who sells or attempts to sell the services of a credit repair services organization shall not:

(1)  Charge a buyer or receive from a buyer money or other valuable consideration unless the credit repair services organization has obtained, in accordance with R.S. 9:3573.4, a surety bond issued by a surety company authorized to do business in this state.

(2)  Make or use a false or misleading representation in the offer or sale of the services of a credit repair services organization, including guaranteeing to “erase bad credit” or words to that effect unless the representation clearly discloses that this can be done only if the credit history is inaccurate or obsolete.

(3)  Engage, directly or indirectly, in a fraudulent or deceptive act, practice, or course of dealing in connection with the offer or sale of the services of a credit repair services organization.

(4)  Make or advise a buyer to make a statement with respect to a buyer’s credit worthiness, credit standing, or credit capacity that is false or misleading or that should be known by the exercise of reasonable care to be false or misleading to a consumer reporting agency or to a person who has extended credit to a buyer.

(5)  Advertise or cause to be advertised, in any manner whatsoever, the services of a credit repair services organization without filing a registration statement with the attorney general, unless otherwise provided by this Part.

(6)  Make nonessential requests for credit information relating to a buyer from any source providing such information for no cost.

(7)  Repealed by Acts 2008, No. 858, §2, eff. July 9, 2008.

(8)  Structure a transaction with a buyer in such a manner as to attempt to circumvent the provisions of this Part.

(9)  Divide a transaction into multiple transactions, such as by attempting to sell or selling any publication, including but not limited to any book, pamphlet, or electronic or computer guide, related in any way to improving a buyer’s credit record, history, or rating, to a buyer and, directly or indirectly, through any affiliate, subsidiary, related person, or otherwise, providing services to the buyer to assist him in utilizing or implementing the information or directions contained therein, unless all charges and fees related to such sale and service combined do not exceed the bona fide costs for publishing the copy of such publication.

(10)  Violate any provision of the federal Credit Repair Organizations Act, 15 U.S.C. 1679 et seq., as amended.  Any violation of such Act shall constitute a violation of state law.

• 3573.4.  Bond; trust account

http://legis.la.gov/legis/Law.aspx?d=107712 

1. All credit repair services organizations shall obtain a surety bond issued by a company licensed to do business in Louisiana.
2. The bond shall be filed with the attorney general of Louisiana.
3. The bond must be in favor of the state of Louisiana for the benefit of any person who is damaged by any violation of this Part.
4. Any persons claiming against the bond for a violation of this Part may maintain an action at law against the credit repair services organization and against the surety or trustee.  The surety or trustee shall be liable only for damages awarded under R.S. 9:3573.10 and not the punitive damages permitted under that Section.  The aggregate liability of the surety or trustee to all persons damaged by a credit repair services organization’s violation of this Part shall not exceed the amount of the bond or trust account.
5. The bond shall be in the amount of one hundred thousand dollars.
6. The credit repair services organization shall notify the attorney general in writing within thirty days after it has ceased to do business in this state.
7. The failure to obtain or file the bond as required by this Section shall constitute a violation of this Part for purposes of civil or criminal remedies or penalties.

• 3573.6.  Disclosure statement

http://legis.la.gov/legis/Law.aspx?d=107714 

1. Before executing a contract or agreement with a buyer or receiving money or other valuable consideration, a credit repair services organization shall provide the buyer with a statement in writing, containing:

(1)  A complete and detailed description of the services to be performed by the credit repair services organization for the buyer and the total cost of the services.

(2)  A statement explaining the buyer’s right to proceed against the bond required by R.S. 9:3573.4.

(3)  The name and address of the surety company that issued the bond or the name and address of the depository and the trustee and the account number of the trust account.

(4)  A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer reporting agency, as provided by the Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.).

(5)  A statement that the buyer’s file is available for review from the consumer reporting agency at no charge, under certain circumstances, if requested by the consumer within thirty days of receiving notice of a denial of credit and as provided in the federal Fair Credit Reporting Act.

(6)  A complete and accurate statement of the buyer’s right to dispute directly with the consumer reporting agency the completeness or accuracy of an item contained in a file on the buyer maintained by that consumer reporting agency.

(7)  A statement that accurate information cannot be permanently removed from the files of a consumer reporting agency.

(8)  A complete and accurate statement of when consumer information becomes obsolete and of when consumer reporting agencies are prevented from issuing reports containing obsolete information.

(9)  A complete and accurate statement of the availability of nonprofit credit counseling services.

1. The credit repair services organization shall maintain on file, for a period of four years after the date the statement is provided, an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.

• 3573.7.  Form and terms of contract

http://legis.la.gov/legis/Law.aspx?d=107715 

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

(1)  A statement in type that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written materials so as to be conspicuous, in immediate proximity to the space reserved for the signature of the buyer, as follows: “You, the buyer, may cancel this contract at any time before 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 repair services organization or to another person.

(3)  A full and detailed description of the services to be performed by the credit repair services organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated length of time, not to exceed one hundred eighty days, for performing the services.

(4)  The address of the credit repair services organization’s principal place of business and the name and address of its agent in the state authorized to receive service of process.

1. The contract must have attached two easily detachable copies of a notice of cancellation.  The notice must be in boldfaced type and in the following form:

“Notice of Cancellation

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

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

To cancel this contract, send by registered or certified mail, return receipt requested, or deliver in person, a signed dated copy of this cancellation notice, or 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)     “

1. The credit repair services organization shall give to the buyer a copy of the completed contract and all other documents the credit repair services organization requires the buyer to sign at the time they are signed.
2. The breach by a credit repair services organization of a contract under this Part, or of any obligation arising from a contract under this Part, is a violation of this Part.

• 3573.8.  Waiver

http://legis.la.gov/legis/Law.aspx?d=107717 

1. A credit repair services organization shall not attempt to cause a buyer to waive a right under this Part.
2. A waiver by a buyer of any part of this Part is void.

• 3573.10.  Action for damages

http://legis.la.gov/legis/Law.aspx?d=107703 

1. A buyer injured by a violation of this Part or by a credit repair services organization’s breach of contract subject to this Part may maintain an action in a court of competent jurisdiction for recovery of actual damages plus costs of suit and reasonable attorney fees, which shall be measured by the time reasonably expended by the consumer’s attorney and not by the amount of recovery.  In case of an action brought by a buyer, actual damages shall not be less than the amount paid by the buyer to the credit repair services organization.
2. In the event of a willful violation by a credit repair services organization of this Part or of a contract subject to this Part, a person who is injured thereby shall be awarded, in addition to the damages allowable under Subsection A of this Section, an additional amount equal to twice the actual damages awarded under Subsection A of this Section.
3. A person who is entitled to recover damages, costs, or attorney fees from a credit repair services organization may petition the attorney general of Louisiana for relief under any surety bond established pursuant to R.S. 9:3573.4.

• 3573.11.  Orders, injunctions, and publication

http://legis.la.gov/legis/Law.aspx?d=107704 

1. A buyer may bring an action in a court to enjoin a violation of this Part.
2. The attorney general may, in his discretion, conduct such investigations as he deems necessary to ascertain possible violations of this Part.  Any person who is engaged in or is engaging in or is about to engage in any act or practice which is prohibited by this Part or any rule, regulation, or order promulgated or issued pursuant to this Chapter, or any person who has failed to act or is failing to act or is about to fail to act under any affirmative duty imposed by this Part, shall be subject to appropriate action by the attorney general.  Such action shall include but shall not be limited to the issuance of orders to cease and desist, entering into compliance agreements, seeking injunctive relief from a court of competent jurisdiction, or any combination thereof.
3. Repealed by Acts 2009, No. 76, §2.

• 3573.12.  Statute of limitations

http://legis.la.gov/legis/Law.aspx?p=y&d=107705 

An action shall not be brought under R.S. 9:3573.10 or 3573.11 after four years after the date of the execution of the contract for services to which the action relates.

• 3573.13.  Criminal penalty

http://legis.la.gov/legis/Law.aspx?d=107706 

1. A person who willfully violates any provision of this Part is guilty of a misdemeanor and upon conviction may be sentenced to pay a fine of not less than two hundred fifty dollars nor more than five thousand dollars, or to imprisonment not exceeding one year, or both.
2. The attorney general through an administrative action, or the district attorney of any judicial district may maintain an action to enjoin violations of this Part.
3. Costs and reasonable attorney fees shall be awarded to the attorney general or a district attorney in all injunctive actions where the attorney general or district attorney successfully enforces this Part.

• 3573.14.  Burden of proving exemption

http://legis.la.gov/legis/Law.aspx?d=107707 

3573. In an action under this Part, the burden of proving an exemption under R.S. 9:3573.2(B) shall be on the person claiming the exemption.
3574. Repealed by Acts 2004, No. 79, §2, eff. May 28, 2004.

• 3573.15.  Remedies cumulative

http://legis.la.gov/legis/Law.aspx?d=107708 

The remedies provided by this Part are in addition to any other remedies provided by law.

• 3573.16.  Civil money penalties

http://legis.la.gov/legis/Law.aspx?d=107709 

A person who violates a provision of this Part may be fined up to one thousand dollars for each violation.  The attorney general may maintain a civil action in a court of competent jurisdiction to recover such fines, together with his costs and attorney fees incident to such action.