Existing law, the Credit Services Act of 1984, defines and regulates the activities of credit services organizations. Existing law generally defines a credit services organizations as a person who, for payment, performs specified credit-related services, such as improving a buyer's credit record and obtaining loans. Existing law requires credit services organizations to obtain a surety bond, as specified, before conducting business and requires that they register with the Attorney General, subject to a fee of $100. Among other things, existing law prohibits a credit services organization from receiving money before full and complete performance of the service the organization has agreed to perform and from failing to perform services agreed upon within 6 months. Existing law requires that credit services be provided pursuant to a written contract, which is required to contain specified statements, and, before the execution of a contract, a credit services organization must provide a prescribed information statement. Existing law authorizes a buyer of services who is injured by a credit services organization's violation of the act, or its breach of contract, to bring an action for damages or injunctive relief, as specified. Existing law also authorizes any person, including a consumer credit reporting agency, to bring an action, as specified, for a violation of the act.
This bill would replace the term "buyer" with the term "consumer" for purposes of describing a person utilizing the services of a credit services organization and would prescribe other definitions in this regard. The bill would require a credit services organization to provide a consumer an itemized monthly statement showing each service performed for a consumer, as specified, and would require the organization to perform services agreed upon within 180 days of contracting for those services. The bill would extend prohibitions on counseling a consumer to make untrue statements to other specified parties. Among other things, the bill would prohibit a credit services organization from impersonating a consumer, from failing to identify communications originating from the organization, or from submitting a dispute to a consumer credit reporting agency, creditor, debt collector, or debt buyer more than 180 days after the disputed account has been removed.
The bill would require a credit services organization to redact specified information in certain written communications. The bill would require a credit services organization to maintain certain information on file for 4 years. The bill would revise information that must be provided before a credit service contract is executed, including a notice regarding the filing of complaints with the Attorney General, and would require the Attorney General to maintain an internet website for this purpose. The bill would revise statements that a credit services contract must include. The bill would prescribe statutory penalties that may be imposed on a credit services organization that willfully and knowingly violates the act. The bill would authorize the Department of Justice to annually determine the amount of the fee it is authorized to charge for registration of credit services organizations to reflect its costs.

Statutes affected:
AB699: 1789.11 CIV, 1789.12 CIV, 1789.13 CIV, 1789.14 CIV, 1789.15 CIV, 1789.16 CIV, 1789.19 CIV, 1789.21 CIV, 1789.25 CIV
02/19/19 - Introduced: 1789.11 CIV, 1789.12 CIV, 1789.13 CIV, 1789.14 CIV, 1789.15 CIV, 1789.16 CIV, 1789.19 CIV, 1789.21 CIV, 1789.25 CIV
01/06/20 - Amended Assembly: 1789.11 CIV, 1789.12 CIV, 1789.13 CIV, 1789.14 CIV, 1789.15 CIV, 1789.16 CIV, 1789.19 CIV, 1789.21 CIV, 1789.25 CIV
01/16/20 - Amended Assembly: 1789.11 CIV, 1789.12 CIV, 1789.13 CIV, 1789.14 CIV, 1789.15 CIV, 1789.16 CIV, 1789.19 CIV, 1789.21 CIV, 1789.25 CIV