WI-Wisconsin

Credit Repair Laws for WI-Wisconsin

State Regulation:

SUBCHAPTER V

CREDIT SERVICES ORGANIZATIONS

422.501 Definitions. In this subchapter:

(1) “Buyer” means a natural person or customer who is solicited

to purchase or who purchases the services of a credit services

organization.

(1m) “Consumer reporting agency” has the meaning given in

15 USC 1681a (f).

(2) (a) “Credit services organization” means a person or merchant

who, with respect to the extension of credit by others, sells,

provides or performs, or represents that the person will sell, provide

or perform, any of the following services in return for the payment

of money or for other valuable consideration:

1. Improving a buyer’s credit record, credit history or credit

rating.

2. Arranging for or obtaining an extension of credit for a

buyer.

3. Providing advice or assistance to a buyer with regard to

subd. 1. or 2.

(b) “Credit services organization” does not include any of the

following:

1. A person organized, chartered or holding a license or

authorization certificate to make loans or extensions of credit pursuant

to the laws of this state or the United States and who is subject

to regulation and supervision by an official or agency of this

state or the United States.

2. A bank or savings and loan association whose deposits or

accounts are insured by the federal deposit insurance corporation,

or a credit union whose deposits or accounts are insured by the

national credit union administration.

3. A nonprofit organization described under section 501 (c)

(3) of the internal revenue code and exempt from taxation under

section 501 (a) of the internal revenue code.

4. A person licensed as an adjustment service company under

s. 218.02 if the person is acting within the course and scope of that

license.

5. A person licensed as a real estate broker or salesperson

under ch. 452 if the person is acting within the course and scope

of that license.

6. A person licensed to practice law in this state if the person

is rendering services within the course and scope of his or her

practice as an attorney at law.

7. A broker-dealer or agent registered under s. 551.406 if the

broker-dealer or agent is acting within the course and scope of that

license.

NOTE: Subd. 7. is shown as amended eff. 1-1-09 by 2007 Wis. Act 196. Prior

to 1-1-09 it reads:

7. A broker-dealer or agent licensed under s. 551.31 if the broker-dealer

or agent is acting within the course and scope of that license.

8. A person registered as a mortgage banker, loan originator

or mortgage broker under s. 224.72 if the person is acting within

the course and scope of that registration.

9. A consumer reporting agency, if the consumer reporting

agency is acting within the scope of assembling or evaluating consumer

credit information on consumers for the purpose of furnishing

consumer reports, as defined in 15 USC 1681a (d), to 3rd parties.

(3) “Extension of credit” means the right to defer payment of

debt or to incur debt and defer its payment, that is offered or

granted for debt that is incurred primarily for personal, family or

household purposes.

History: 1991 a. 244; 1995 a. 27; 1997 a. 145, 302; 2007 a. 196.

422.502 Registration requirements. (1) A person may

not act as a credit services organization unless the person has been

issued a certificate of registration from the administrator and the

person has complied with the bond or letter of credit requirements

under sub. (3).

(2) A person desiring to act as a credit services organization

shall apply to the administrator for a certificate of registration on

a form prescribed by the administrator and shall pay the administrator

a registration fee of $100.

(3) (a) A person desiring to act as a credit services organization

shall obtain a surety bond that is issued by a surety company

admitted to do business in this state or an irrevocable letter of

credit from a federally insured bank or savings and loan association

located in this state. The bond or letter of credit shall be in an

amount equal to $25,000.

(b) The credit services organization shall file a copy of the

bond or letter of credit with the administrator.

(c) The bond or letter of credit shall be in favor of this state for

the benefit of any person who is damaged by a violation of this

subchapter. The bond or letter of credit shall also be in favor of

any person damaged by a violation of this subchapter.

(d) A person claiming against the bond or letter of credit for

a violation of this subchapter may maintain an action at law

against the credit services organization and against the surety or

financial institution. The surety or financial institution may be

liable only for actual damages and not for punitive damages. The

aggregate liability of the surety or financial institution to all persons

damaged by a credit services organization’s violation of this

subchapter may not exceed the amount of the bond or letter of

credit.

(4) A certificate of registration as a credit services organization

expires on December 1 of the even-numbered year after

issuance. A credit services organization may renew a certificate

of registration by submitting to the administrator a renewal

application and a $100 renewal fee on or before the expiration date

of the existing certificate of registration. A credit services organization

shall refile a bond or letter of credit that satisfies sub. (3)

as part of the renewal application.

History: 1991 a. 244; 1999 a. 85.

422.503 Prohibited activities. (1) A credit services organization,

and its salespersons, agents and representatives who

offer or sell the services of the credit services organization, may

not do any of the following:

(a) Charge or receive any money or other valuable consideration

solely for referral of the buyer to a merchant who will or may

extend credit to the buyer, if the credit extended to the buyer is

upon substantially the same terms as is credit that is available to

the general public.

(b) Make, or counsel or advise any buyer to make, any statement

which is untrue or misleading and which is known, or which

by the exercise of reasonable care should be known, to be untrue

or misleading, to a consumer reporting agency or to any person

who has extended credit to a buyer or to whom a buyer is applying

for an extension of credit, with respect to a buyer’s credit worthiness,

credit standing or credit capacity.

(c) Make or use any untrue or misleading representations in the

offer or sale of the services of the credit services organization or

engage, directly or indirectly, in any act, practice or course of business

that operates or would operate as a fraud or deception upon

any person in connection with the offer or sale of the services of

a credit services organization.

(2) A violation of this section is subject to s. 425.305.

History: 1991 a. 244.

422.504 Information statement. (1) Before the execution

of a contract or agreement between the buyer and a credit services

organization or before the credit services organization receives

from the buyer any money or other valuable consideration, the

credit services organization shall provide the buyer a written statement

that includes all of the information required under sub. (2).

The credit services organization shall maintain for a period of 2

years an exact copy of the statement that is signed by the buyer to

acknowledge receipt of the statement.

(2) The information statement under sub. (1) shall include all

of the following information:

(a) Notice of the buyer’s right to review any file on the buyer

maintained by a consumer reporting agency; the buyer’s right to

obtain a copy of that file; the approximate price the buyer may be

charged by the consumer reporting agency for a copy of the file;

and the buyer’s right to obtain a copy of the buyer’s file free of

charge from the consumer reporting agency if the buyer requests

the copy within 30 days after the buyer receives notice of a denial

of credit.

(b) Notice of the buyer’s right to dispute the completeness or

accuracy of any item contained in any file on the buyer maintained

by a consumer reporting agency.

(c) A description of the services to be performed by the credit

services organization for or on behalf of the buyer and the total

amount the buyer will be charged for the services.

(d) Notice of the buyer’s right to proceed against the bond or

letter of credit obtained by the credit services organization, a

description of procedures that the buyer is to follow to proceed

against the bond or letter of credit, and the name and address of

the surety company that issued the bond or the name and address

of the financial institution that issued the letter of credit.

(3) A violation of this section is subject to s. 425.305.

History: 1991 a. 244.

422.505 Contracts. (1) Every contract between a buyer and

a credit services organization for the purchase of the services of

the credit services organization shall be in writing, shall be dated

and shall be signed by the buyer. The contract shall include all of

the following:

(a) A conspicuous statement, in not less than 10-point boldface

type and 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 5TH DAY AFTER THE DATE OF THE

TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION

FORM FOR AN EXPLANATION OF THIS

RIGHT.”

(b) The terms and conditions of payment, including the total

of all payments to be made by the buyer, whether to the credit services

organization or to another person.

(c) A description of the services to be performed by the credit

services organization for or on behalf of the buyer, including all

guarantees or promises of full or partial refunds, and the estimated

date by which such services are to be performed or the estimated

length of time for performing such services.

(d) The credit services organization’s principal business

address and the name and address of its agent in this state, other

than the department of financial institutions, who is authorized to

receive service of process.

(e) A conspicuous statement, in not less than 8-point boldface

type, as follows: “THIS CREDIT SERVICES ORGANIZATION

IS REGISTERED BY THE DEPARTMENT OF FINANCIAL

INSTITUTIONS at .... (insert address).”

(f) Any disclosures required under subch. III.

(2) (a) The contract shall be accompanied by a completed

form in duplicate, captioned “NOTICE OF CANCELLATION”,

which shall be attached to the contract and easily detachable, and

which shall contain the following statement in not less than

10-point type and written in the same language as used in the contract:

NOTICE OF CANCELLATION

You may cancel this contract, without any penalty or obligation,

within 5 days after the date on which the contract is signed.

If you cancel, any payment made by you under this contract

will be returned within 15 days following receipt by .... (name of

credit services organization) of your cancellation notice.

To cancel this contract, mail or deliver a signed and dated copy

of this cancellation notice, or any other written notice, to .... (name

of credit services organization) at .... (address of credit services

organization), .... (place of business, if different from address) not

later than midnight .... (date). I hereby cancel this transaction.

.... (Date)

.... (Buyer’s signature)

(b) A copy of the fully completed contract and any other document

the credit services organization requires the buyer to sign

shall be given to the buyer at the time the contract or document is

signed.

(3) A credit services organization’s breach of a contract under

this section or of any obligation arising from such a contract is a

violation of this subchapter.

(4) A violation of this section is subject to s. 425.305.

History: 1991 a. 244; 1995 a. 27, 216.

422.506 Waiver. (1) A waiver by a buyer of any provision of

this subchapter shall be void and unenforceable. An attempt by

a credit services organization to have a buyer waive any right

under this subchapter is a violation of this subchapter.

(2) A violation of this section is subject to s. 425.305.

History: 1991 a. 244.

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