BANKS AND BANKING
26-2229A. Requirement of fair, open, and honest dealing — Prohibited practices. (1) Every licensee or person required to be licensed under this chapter and its agents shall deal openly, fairly, and honestly without deception in the conduct of its business activities in this state under this chapter.
(2) When not inconsistent with the statutes of this state, the provisions of the federal fair debt collection practices act, 15 U.S.C. 1692 et seq., as amended, may be enforced by the director against collection agencies licensed or required to be licensed under the provisions of this chapter.
(3) In every instance where a collection agency licensee has a managerial or financial interest in a creditor client, or where a creditor client has a managerial or financial interest in a collection agency licensee, disclosure of such interest must be made on each and every contact with a debtor in seeking to make a collection of any account, claim, or other indebtedness.
(4) No collection agency licensee, or collection agency required to be licensed under this chapter, or agent of such collection agency shall collect or attempt to collect any interest or other charges, fees, or expenses incidental to the principal obligation unless such interest or incidental fees, charges, or expenses:
(a) Are expressly authorized by statute;
(b) Are allowed by court ruling against the debtor;
(c) Are expressly authorized by the agreement creating the debt, except as otherwise prohibited by law. Provided, however, that no person shall collect any attorney’s fees or litigation costs unless such attorney’s fees or litigation costs are reasonable, are for actual attorney services performed, and are limited to those costs actually incurred;
(d) Have been judicially determined;
(e) Are provided for in a written form agreement that is signed by both the debtor and the licensee and has the prior approval of the director with respect to the terms of the agreement and amounts of the fees, interest, charges, and expenses; or
(f) Reasonably relate to the actual cost associated with processing a demand draft or other form of electronic payment on behalf of a debtor for a debt payment, provided that the debtor has preauthorized the method of payment and has been notified in advance that such payment may be made by reasonable alternative means that will not result in additional charges, fees, or expenses to the debtor.
(5) No person shall sell, distribute, or make use of solicitations, collection letters, demand forms, or other printed matter that are made similar to or resemble governmental forms or documents or legal forms used in civil or criminal proceedings.
(6) No person shall use any trade name, address, insignia, picture, emblem, or any other means that creates any impression that such person is connected with or is an agency of government.
(7) No person licensed or required to be licensed under this chapter shall misappropriate, transfer, or convert to his own use or benefit funds belonging to or held for another person in connection with business activities authorized under this chapter.
(8) No credit repair organization licensed or required to be licensed under this chapter shall charge or receive money or other valuable consideration for the performance of any service the credit repair organization has agreed to perform for any consumer before such service is fully performed.
(9) No person licensed or required to be licensed under this chapter shall make a representation or statement of material fact, or omit to state a material fact, in connection with the offer, sale, or performance of any service authorized under this chapter, if the representation, statement, or omission is false or misleading or has the tendency or capacity to be misleading.
[26-2229A, added 1973, ch. 263, sec. 2, p. 538; am. 1993, ch. 165, sec. 1, p. 417; am. 1995, ch. 211, sec. 6, p. 719; am. 1997, ch. 370, sec. 4, p. 1180; am. 2008, ch. 347, sec. 10, p. 946; am. 2022, ch. 286, sec. 4, p. 908.]