Current through Register Vol. 48, No. 12, March 22, 2024
a)
Required Files
1) Every debt settlement
provider shall keep the following records, if applicable, or their equivalent
in accord with generally accepted accounting principles as approved by the
Department of Financial and Professional Regulation-Division of Financial
Institutions:
A) Client File
B) Client Activity Record
C) Payment Detail Report
D) Index System
2) If a computerized system is in use, debt
settlement provider shall maintain a permanent file of back-up computer media
for the end of each month.
3) All
books and records shall be kept current and available for examination by the
Division.
b) Client File
The client file shall contain the following: the original
contract; a list of creditors, including the balance owed to each and any
payments due; the total amount of any fees paid by the debtor; the amount held
in trust (if applicable); any settlement offers made and received on each of
the debtor's accounts; all evidence of any legally enforceable settlements with
the debtor's creditors; a written analysis of the debtor's income and expenses
to substantiate that the plan of payment is feasible and practical; and copies
of all receipts issued for each payment made by the debtor.
c) Client Activity Record
The Client Activity Record shall contain the original entry, be
a permanent record, and show the debtor's account number, name, address, date
of contract, total indebtedness, monthly receipts, any fees charged, amounts
disbursed to creditors, if applicable, and the estimated term of the contract
to satisfy the amount owed.
1) If a
contract is cancelled by a debt settlement provider or debtor and a fee is
claimed but not paid, the debtor activity record shall show the reason for
cancellation and the amount of any fee claimed to be owed.
2) If legal action is taken to collect an
unpaid fee, the client activity record shall include a copy of the judgment or
action taken.
3) A separate file of
all litigation accounts shall be maintained in the office of the debt
settlement provider.
d)
Payment Detail Report
An individual Payment Detail Report shall be maintained for
each debtor, corresponding to the monthly accounting provided to the debtor
pursuant to Section 65(c) of the Act.
1) A file shall be kept containing the paid
or canceled Payment Detail Reports for a period of 5 years, showing the
receipts and disbursements, if applicable, in full and the total amount of fees
collected. In a non-computerized system, adding machine tapes verifying the
receipts against all disbursements, including total fees, shall be attached to
each client file.
2) The entries on
the Payment Detail Report shall correspond with the monthly accounting given to
the debtor and shall reflect all funds submitted by the debtor during the month
and all disbursements from those funds, showing all amounts retained by the
licensee as provider fees and all amounts paid to creditors.
3) In a non-computerized system, all entries
shall be made in ink and no erasures whatsoever may be made on the report. In
case of error, a line should be drawn in ink through the improper entry and the
correct entry made on the following line. No entries shall be masked, covered
or rendered illegible.
e) Index System
An alphabetical index system shall be kept indicating name and
address of clients, account number, date of contract and total
indebtedness.