Deceptive practices: debt settlement.

The Consumers Legal Remedies Act makes unlawful various specified methods, acts, or practices undertaken in a transaction intended to result or that results in the sale or lease of goods or services to any consumer, and provides for civil actions by persons who suffer damage as a result of the use or employment of these methods, acts, or practices. The Check Sellers, Bill Payers and Proraters Law licenses and regulates proraters. Existing law defines a "prorater" as a person who, for compensation, engages in the business of receiving money or evidences thereof for the purpose of distributing the money or evidences thereof among creditors in payment or partial payment of the obligations of the debtor. This bill would include, as an unlawful act under the Consumer Legal Remedies Act, engaging in the business of receiving or soliciting money or evidences thereof, or processing payment for the purpose of distributing the money or evidences thereof, among creditors in payment or partial payment of the obligations of the debtor in a manner that deceives consumers, including by, among other methods, failing to disclose clearly and conspicuously the terms and risks of the program. The bill would also include as an unlawful practice under the act, engaging in the business of a prorater in a manner that violates the Check Sellers, Bill Payers and Proraters Law. The bill would make it an unlawful act to provide payment processing services, for which a fee is charged to a consumer, to a prorater that is acting in violation of these provisions. The bill would specify that these provisions do not apply to entities that are exempt from taxation, as specified.