HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1031 Debt Relief Services
SPONSOR(S): Insurance & Banking Subcommittee, Buchanan
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1074
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N, As CS Fletcher Lloyd
2) Commerce Committee 18 Y, 0 N Fletcher Hamon
SUMMARY ANALYSIS
Individuals seeking to manage and reduce their debts often engage credit counseling organizations who
provide debt management services and credit counseling services. “Debt management services” is defined by
Florida statute as services provided to a debtor by a credit counseling organization for a fee to effect the
adjustment, compromise, or discharge of any unsecured account, note, or other indebtedness of the debtor, or
receive from the debtor and disburse to a creditor any money or other thing of value.
Any person engaging in debt management services or credit counseling services must comply with Part IV of
ch. 817, F.S., which sets a limitation on fees; requires certain disclosures and financial reporting; sets minimum
insurance requirements; specifies acts which are considered violations; and subjects the person engaging in
such services to the enforcement provisions of Part IV of ch. 817, F.S.
As an alternative to debt management services, individuals who struggle to pay their credit card bills can turn
to organizations that offer debt relief services. Unlike credit counseling organizations, debt relief service
providers are for-profit businesses that work with credit card companies to renegotiate the amount of principal
owed on an individual’s debt.
Florida law does not currently define “debt relief services” nor separately regulate providers of debt relief
services. However, debt relief companies that use telemarketing to contact potential customers or hire people
on their behalf to do so are regulated by the federal Telemarketing and Consumer Fraud and Abuse
Prevention Act (Telemarketing Act), 15 U.S.C. ss. 6101-6108.
The federal regulation under the Telemarketing Act is known as the Telemarketing Sales Rule (TSR), 16
C.F.R. s. 310.2. The TSR provides certain definitions and specifies certain acts that are considered deceptive
and abusive telemarketing practices. Although Florida law does not currently regulate providers of debt relief
services, the Attorney General has sufficient authority to enforce a violation of the Telemarketing Act or the
TSR as an unfair or deceptive trade practice under part II of ch. 501, F.S.
The bill:
Expands the list of exceptions to Part IV of ch. 817, F.S., relating to credit counseling services, to also
exempt a telemarketer or seller who provides any debt relief services; and
Provides that certain relevant terms have the same meanings as provided in the federal Telemarketing
Sales Rule, 16 C.F.R. s. 310.2.
The bill has no fiscal impact on state government or local government. It has an indeterminate positive and
negative impact on the private sector.
The bill provides an effective date of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h1031c.COM
DATE: 2/8/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Debt Management Services
Individuals seeking to manage and reduce their debts often engage credit counseling organizations
who provide debt management services and credit counseling services.1 These organizations are non-
profit businesses that assist debtors with managing and reducing their debt by:
Offering free counseling on credit practices,
Enrolling qualifying debtors in debt management plans, and
Providing community education to individuals and families on money management skills. 2
“Debt management services” is defined by Florida statute as services provided to a debtor by a credit
counseling organization for a fee to effect the adjustment, compromise, or discharge of any unsecured
account, note, or other indebtedness of the debtor, or receive from the debtor and disburse to a
creditor any money or other thing of value.3
Any person engaging in debt management services or credit counseling services must comply with Part
IV of ch. 817, F.S., which sets a limitation on fees;4 requires certain disclosures and financial reporting;5
sets minimum insurance requirements;6 specifies certain acts that are considered violations; 7 and
subjects the person engaging in such services to the enforcement provisions of Part IV of ch. 817, F.S. 8
Additionally, any person who violates Florida’s laws relating to debt management services commits an
unfair or deceptive trade practice as defined in Part II of ch. 501, F.S., which relates to Florida’s
consumer protection laws.9 Further, any consumer injured by a violation of Part II of ch. 501, F.S., may
bring an action for recovery of damages.10 If an injured consumer does bring such an action, judgement
must be entered for actual damages, but in no case less than the amount paid by the consumer to the
credit counseling agency, plus reasonable attorney’s fees and costs. 11
Florida law currently provides that Part IV of ch. 501, F.S., does not apply to:
Any debt management or credit counseling services provided in the practice of law in this state;
Any person who engages in debt adjustment to adjust the indebtedness owed to such person;
and
The following entities and their subsidiaries:
o The Federal National Mortgage Association;
o The Federal Home Loan Mortgage Corporation;
o The Florida Housing Finance Corporation;
o A bank, bank holding company, trust company, savings and loan association, credit
union, credit card bank, or savings bank that is regulated and supervised by the Office of
the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve,
1 Consumer Financial Protection Bureau, What is credit counseling?, https://www.consumerfinance.gov/ask-
cfpb/whatiscredit-counseling-en-1451/ (last visited Jan. 12, 2024).
2 Id.
3 S. 817.801(4), F.S.
4 See s. 817.802, F.S.
5 See s. 817.804, F.S.
6 See s. 817.804(1)(b), F.S.
7 S. 817.806, F.S.
8 Id.
9 S. 817.806(1), F.S.
10 Id.
11 Id.
STORAGE NAME: h1031c.COM PAGE: 2
DATE: 2/8/2024
the Federal Deposit Insurance Corporation, the National Credit Union Administration,
OFR, or any state banking regulator;
o A consumer reporting agency as defined in the Federal Fair Credit Reporting Act, 15
U.S.C. ss. 1681-1681y, as it existed on April 5, 2004; or
o Any subsidiary or affiliate of a bank holding company, its employees and its exclusive
agents acting under written agreement.12
Debt Relief Services
As an alternative to debt management services, individuals who struggle to pay their credit card bills
can turn to organizations that offer debt relief services.13 Unlike credit counseling organizations, debt
relief service providers are for-profit businesses that work with credit card companies to renegotiate the
amount of principal owed on an individual’s debt.14
Florida law does not currently define “debt relief services” nor separately regulate providers of debt
relief services. However, debt relief companies that use telemarketing to contact potential customers or
hire people on their behalf to do so are regulated by the federal Telemarketing and Consumer Fraud
and Abuse Prevention Act (Telemarketing Act), 15 U.S.C. ss. 6101-6108.15
The federal regulation under the Telemarketing Act is known as the Telemarketing Sales Rule (TSR),
16 C.F.R. s. 310.2. The TSR defines the following terms as follows:
“Debt relief services” means any program that claims directly, or implies, that it can renegotiate,
settle, or in some way change the terms of an individual’s debt to an unsecured creditor or debt
collector.16 These services typically include reducing the balance, interest rates, or fees that an
individual owes.17
“Seller” means any person who, in connection with a telemarketing transaction, provides, offers
to provide, or arranges for others to provide goods or services to the customer in exchange for
consideration.18
“Telemarketer” means any person who, in connection with telemarketing, initiates or receives
telephone calls to or from a customer or donor.19
The TSR specifies certain acts that are considered deceptive and abusive telemarketing practices. 20
Examples of such acts include:
Before a customer consents to pay for goods or services offered, failing to disclose truthfully, in
a clear and conspicuous manner, certain material information; 21
Misrepresenting, directly or by implication, in the sale of goods or services, certain material
information;22
Causing billing information to be submitted for payment, or collecting payment for goods or
services, directly or indirectly, without the customer’s express authorization; 23
Assisting or facilitating any seller or telemarketer that knows or consciously avoids knowing that
they are engaged in any act or practice that violates the provisions of the regulations; 24
12 S. 817.803, F.S.
13 Federal Trade Commission, Debt Relief Services & the Telemark eting Sales Rule: A Guide for Business,
https://www.ftc.gov/system/files/documents/plain-language/bus72-debt-relief-services-telemarketing-sales-rule-guide-
business.pdf (last visited Jan. 12, 2024).
14 Id.
15 Id.
16 16 C.F.R. s. 310.2(o), F.S.
17 Id.
18 16 C.F.R. s. 310.2(dd).
19 16 C.F.R. s. 310.2(ff).
20 See 16 C.F.R. ss. 310.3 and 310.4.
21 See 16 C.F.R. s. 310.3(a)(1)(i)-(viii).
22 See 16 C.F.R. s. 310.3(a)(2).
23 See 16 C.F.R. s. 310.3(a)(3).
24 See 16 C.F.R. s. 310.3(b).
STORAGE NAME: h1031c.COM PAGE: 3
DATE: 2/8/2024
Requesting or receiving payment for goods or services represented to remove derogatory
information from, or improve, a person’s credit history, credit record, or credit rating until certain
conditions are met;25 and
Requesting or receiving payment in advance of obtaining a loan or other extension of credit
when the seller or telemarketer has guaranteed or represented a high likelihood of success in
obtaining or arranging a loan or other extension of credit. 26
Although Florida law does not currently regulate providers of debt relief services, the Attorney General
has sufficient authority to enforce a violation of the Telemarketing Act or the TSR as an unfair or
deceptive trade practice under part II of ch. 501, F.S.27
Effect of the Bill
The bill expands the list of exceptions to Part IV of ch. 817, F.S., to any telemarketer or seller who
provides any debt relief services. The bill also provides that the terms “telemarketer,” “seller,” and “debt
relief services” have the same meanings as provided in the TSR.
B. SECTION DIRECTORY:
Section 1. Amends s. 817.803, F.S., relating to exceptions.
Section 2. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
25 See 16 C.F.R. s. 310.4(a)(2).
26 See 16 C.F.R. s. 310.4(a)(4).
27 Email from Elizabeth Guzzo, Director of Legislative Affairs, Office of the Attorney General, RE: HB 1031, Debt Relief
Services (Jan. 17, 2024).
STORAGE NAME: h1031c.COM PAGE: 4
DATE: 2/8/2024
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not confer rulemaking authority nor require the promulgation of rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 25, 2024, the Insurance & Banking Subcommittee considered the bill, adopted one
amendment, and reported the bill favorably as a committee substitute. The amendment:
Expanded the list of exceptions to part IV of ch. 817, F.S., relating to credit counseling services, to
any telemarketer or seller who provides any debt relief services; and
Provided that certain terms have the same meanings as provided in the TSR.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
STORAGE NAME: h1031c.COM PAGE: 5
DATE: 2/8/2024
Statutes affected: H 1031 Filed: 817.806
H 1031 c1: 817.803
H 1031 er: 817.803