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Maryland

State Laws

Maryland Credit Repair Laws.

This state currently has legislation pertaining to credit repair. These laws apply to the state that the consumer is located in, not the credit repair company. Keep this in mind if you plan on doing business out of state.

**DISCLAIMER - The following information is not legal advice. We strive to keep all information updated to the best of our knowledge but regulations are subject to change frequently, without our immediate awareness. The information on this page may not be 100% accurate. We strongly urge you to do your own research and to consult with a legal professional or your local legislators before making any decisions. 

Commissioner of Financial Regulation of the Maryland Department of Labor

Department Overseeing Entity

Visit Website
Address
500 North Calvert Street #401,
Baltimore, MD 21202
Phone
(410) 230-6001

Maryland

Registration Requirements.

Some states require registration with the overseeing entity. There may also be municipal or county regulations regarding business licensing or permits depending on your location. Consult with your local government to determine licensing requirements. 

Registration required?

Yes.

Fee for registration?

$850.00

Additional fees?

$100 - Investigation fee.

Link to registration requirements?

§ 14-1903

Link to registration forms?

Click here.

Maryland

Bond Requirements.

Surety bonds are required in certain states in order to prove that the credit repair organization is operating in an ethical manner. The amount and requirements vary from state to state.

Bond required?

Yes.

Amount of bond required?

$50,000.00

Link to bond requirements?

§ 14-1908

Link to bond submission application?

Click here.

Contract required?

Yes.

Contract disclosure language?

§ 14-1906

Additional language requirements?

§ 14-1904, § 14-1905

Attorneys exempt?

Yes.

CPAs exempt?

Yes.

Financial advisors exempt?

Yes.

Mortgage lenders/ Originators exempt?

Yes.

Real estate agents exempt?

Yes.

Non-profits exempt?

Yes.

Non-profit exemption details, restrictions?

None specified.

To view the full legal text, see below or click here for the most updated version.

 

MD Code, Commercial Law, § 14-1901
§ 14-1901. Definitions
Currentness
Currentness
A credit services business, its employees, and independent contractors who sell or attempt to sell the services of a credit services business shall not:
(1) Receive any money or other valuable consideration from the consumer, unless the credit services business has secured from the Commissioner a license under Title 11, Subtitle 3 of the Financial Institutions Article;
(2) Receive any money or other valuable consideration solely for referral of the consumer to a retail seller or to any other credit grantor who will or may extend credit to the consumer, if the credit extended to the consumer is substantially the same terms as those available to the general public;
(3) Make, or assist or advise any consumer to make, any statement or other representation that is false or misleading, or which by the exercise of reasonable care should be known to be false or misleading, to a consumer reporting agency, government agency, or person to whom the consumer applies or intends to apply for an extension of credit, regarding a consumer’s creditworthiness, credit standing, credit capacity, or true identity;
(4) Make or use any false or misleading representations in the offer or sale of the services of a credit services business;
(5) Engage, directly or indirectly, in any act, practice, or course of business which operates as a fraud or deception on any person in connection with the offer or sale of the services of a credit services business;
(6) Charge or receive any money or other valuable consideration prior to full and complete performance of the services that the credit services business has agreed to perform for or on behalf of the consumer;
(7) Charge or receive any money or other valuable consideration in connection with an extension of credit that, when combined with any interest charged on the extension of credit, would exceed the interest rate permitted for the extension of credit under the applicable title of this article;
(8) Create, assist a consumer to create, or provide a consumer with information on how to create, a new consumer report, credit file, or credit record by obtaining and using a different name, address, telephone number, Social Security number, or employer tax identification number; or
(9) Assist a consumer to obtain an extension of credit at a rate of interest which, except for federal preemption of State law, would be prohibited under Title 12 of this article.
§ 14-1903. License requirements
Currentness
(a) Notwithstanding any election of law or designation of situs in any contract, this subtitle applies to any contract for credit services if:
(1) The credit services business offers or agrees to sell, provide, or perform any services to a resident of this State;
(2) A resident of this State accepts or makes the offer in this State to purchase the services of the credit services business; or
(3) The credit services business makes any verbal or written solicitation or communication that originates either inside or outside of this State but is received in the State by a resident of this State.
(b) A credit services business is required to be licensed under this subtitle and is subject to the licensing, investigatory, enforcement, and penalty provisions of this subtitle and Title 11, Subtitle 3 of the Financial Institutions Article.
(c)(1) A license required by this subtitle shall be issued by the Commissioner.
(2) The unique identifier of the licensee shall constitute the license number for the license.
(d) A person not included within the definition of a credit services business as provided in § 14-1901(e)(3) of this subtitle is exempt from licensure requirements under this subtitle.
§ 14-1903.1. Advertisements
Currentness
A person who advertises a service described in § 14-1901(e)(1) of this subtitle, whether or not a credit services business, shall clearly and conspicuously state in each advertisement the number of:
(1) The license issued under § 14-1903 of this subtitle; or
(2) If not required to be licensed, the exemption provided by the Commissioner.
§ 14-1904. Information statement provided
Currentness
(a) This section does not apply to a credit services business providing the services described in § 14-1901(e)(1)(ii) of this subtitle.
(b) Before either the execution of a contract or agreement between a consumer and a credit services business or the receipt by the credit services business of any money or other valuable consideration, the credit services business shall provide the consumer with a written information statement containing all of the information required under § 14-1905 of this subtitle.
(c) The credit services business shall maintain on file for a period of 2 years from the date of the consumer’s acknowledgment a copy of the information statement signed by the consumer acknowledging receipt of the information statement.
§ 14-1906. Form of contract
Currentness
(a) Every contract between a consumer and a credit services business for the purchase of the services of the credit services business shall:
(1) Be in writing, dated, and signed by the consumer;
(2) For a credit services business providing the services described in § 14-1901(e)(1)(i) of this subtitle, include:
(i) A conspicuous statement in size equal to at least 10-point bold type, in immediate proximity to the space reserved for the signature of the consumer as follows:
“You, the buyer, may cancel this contract at any time prior to midnight of the third business day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right.”;
(ii) The terms and conditions of payment, including the total of all payments to be made by the consumer, whether to the credit services business or to some other person;
(iii) A complete and detailed description of the services to be performed and the results to be achieved by the credit services business for or on behalf of the consumer, including all guarantees and all promises of full or partial refunds and a list of the adverse information appearing on the consumer’s credit report that the credit services business expects to have modified and the estimated date by which each modification will occur; and
(iv) The principal business address of the credit services business and the name and address of its agent in this State authorized to receive service of process; and
(3) For a credit services business providing the services described in § 14-1901(e)(1)(ii) of this subtitle, include:
(i) A statement of the consumer’s right to file a complaint under § 14-1911 of this subtitle;
(ii) The address of the Commissioner where a consumer can file a complaint under § 14-1911 of this subtitle;
(iii) A statement that a bond exists and the consumer’s right to proceed against the bond under the circumstances and in the manner set forth under § 14-1910 of this subtitle; and
(iv) The principal business address of the credit services business.
(b) The contract shall be accompanied by a form completed in duplicate, captioned “NOTICE OF CANCELLATION”, which shall be attached to the contract and easily detachable, and which shall contain in at least 10-point bold type the following statement:
“NOTICE OF CANCELLATION
You may cancel this contract, without any penalty or obligation, at any time prior to midnight of the third business day after the date the contract is signed.
If you cancel, any payment made by you under this contract will be returned within 10 days following receipt by the seller 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 seller)
 
At 
 
 
(Address of seller)
 
 
 
(Place of business)
 
Not later than midnight 
 
 
(Date)
 
I hereby cancel this transaction.
 
 
 
(Date)
(Buyer’s signature)”
(c) A credit services business providing the services described in § 14-1901(e)(1)(ii) of this subtitle shall provide the consumer with a copy of the contract between the credit services business and the consumer before the consumer executes the contract.
(d) A copy of the completed contract and all other documents the credit services business requires the consumer to sign shall be given by the credit services business to the consumer at the time they are signed.
§ 14-1907. Violations; waivers; burden of proof
Currentness
(a) Any breach by a credit services business of a contract under this subtitle, or of any obligation arising under it, shall constitute a violation of this subtitle.
(b) Any contract for services from a credit services business that does not comply with the applicable provisions of this subtitle shall be void and unenforceable as contrary to the public policy of this State.
(c)(1) Any waiver by a consumer of any of the provisions of this subtitle shall be deemed void and unenforceable by a credit services business as contrary to the public policy of this State; and
(2) Any attempt by a credit services business to have a consumer waive rights given by this subtitle shall constitute a violation of this subtitle.
(d) In any proceeding involving this subtitle, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
§ 14-1908. Surety bond required
Currentness
A credit services business is required to obtain a surety bond pursuant to Title 11, Subtitle 3 of the Financial Institutions Article.
§ 14-1909. Issuance of surety bond
Currentness
The surety bond shall be issued by a surety company authorized to do business in this State.
§ 14-1910. Liability of surety
Currentness
(a) Any person claiming against the surety bond for a violation of this subtitle may maintain an action against the credit services business and against the surety.
(b) The surety shall be liable only for actual damages and not for the punitive damages permitted under § 14-1912 of this subtitle.
(c) The aggregate liability of the surety to all persons damaged by a credit services business’s violation of this subtitle may not exceed the amount of the surety bond.
§ 14-1911. Complaint procedures
Currentness
(a) Any consumer who has reason to believe that this subtitle has been violated by any credit services business or by any other person may file a written complaint setting forth the details of the alleged violation with the Commissioner.
(b) After receiving the complaint, the Commissioner may inspect the pertinent books, records, letters and contracts of any credit services business, and of any person who has furnished information to the credit services business relating to the specific written complaint.
(c) The Commissioner may investigate the complaint and hold a hearing in accordance with Title 10, Subtitle 2 of the State Government Article.
(d) The Commissioner may:
(1) Hold a hearing on the complaint at a time and place in this State reasonably convenient to the parties involved;
(2) Subpoena witnesses;
(3) Take depositions of witnesses residing without the State, in the manner provided for witnesses in civil actions in courts of record;
(4) Administer oaths;
(5) Issue orders for compliance with this subtitle; and
(6) Issue cease and desist orders, after finding a pattern and practice of violation of this subtitle.
(e)(1) The Commissioner shall give to the credit services business, or the salesperson, agent, representative, or independent contractor acting on behalf of the credit services business against whom a complaint is filed, written notice of the complaint and the time and place of any hearing.
(2) The notice shall:
(i) Be in writing; and
(ii) Be sent by certified mail, to the principal place of business of the credit services business or the principal place of business or residence address of the salesperson, agent, representative, or independent contractor acting on behalf of the credit services business, at least 10 days prior to the date of the hearing.
(f)(1) If, after the hearing, the Commissioner finds that the credit services business, or the salesperson, agent, representative, or independent contractor acting on behalf of the credit services business, has engaged or is engaging in any act or practice prohibited by this subtitle, the Commissioner shall order the credit services business or the person or both to cease and desist from the act or practice and may order that restitution be paid to an aggrieved consumer.
(2) The order of the Commissioner shall comply with the Administrative Procedure Act.1
(g)(1) If an appeal is not filed, the order of the Commissioner becomes final after expiration of the time allowed by the Administrative Procedure Act for appeals from the Commissioner’s orders.
(2) If an appeal is filed, the order of the Commissioner becomes final after a final decision of a court affirming the order or dismissing the appeal.
(h) If a credit services business or any other person fails to comply with any lawful order of the Commissioner pursuant to this subtitle or if any witness fails to appear and testify to any matter regarding which he may be lawfully interrogated, on petition of the Commissioner setting forth the facts, the circuit court of any county shall:
(1) Compel obedience to the requirements of the subpoena or order;
(2) Compel the production of contracts, forms, files, and other evidence; and
(3) Order compliance with any lawful order issued by the Commissioner under the provisions of subsection (d)(5) or (6) of this section.
(i) If the credit services business or any other person fails, refuses, or neglects to comply with the order of the court, the court may punish that person for contempt of court.
(j) The Administrative Procedure Act, including its provisions for judicial review of a final decision in a contested case, applies to proceedings before the Commissioner pursuant to this subtitle.
§ 14-1912. Noncompliance
Currentness
(a) Any credit services business which willfully fails to comply with any requirement imposed under this subtitle with respect to any consumer is liable to that consumer in an amount equal to the sum of:
(1) Any actual damages sustained by the consumer as a result of the failure;
(2) A monetary award equal to 3 times the total amount collected from the consumer, as ordered by the Commissioner;
(3) Such amount of punitive damages as the court may allow; and
(4) In the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney’s fees as determined by the court.
(b) Any credit services business which is negligent in failing to comply with any requirement imposed under this subtitle with respect to any consumer is liable to that consumer in an amount equal to the sum of:
(1) Any actual damages sustained by the consumer as a result of the failure; and
(2) In the case of any successful action to enforce any liability under this section, the cost of the action together with reasonable attorney’s fees as determined by the court.
§ 14-1913. Limitations
Currentness
(a) An action to enforce any liability created under this subtitle shall be brought within 2 years from the date the violation at issue occurred.
(b) Where a defendant has materially and willfully misrepresented any information required to be disclosed to a consumer by this subtitle and the information is material to establishing defendant’s liability, the action may be brought at any time within 2 years of the discovery of the misrepresentation.
§ 14-1914. Violation of subtitle an unfair or deceptive trade practice
Currentness
(a) Each sale of the services of a credit services business that violates any provision of this subtitle is an unfair or deceptive trade practice under Title 13 of this article.
(b) If the Division of Consumer Protection of the Office of the Attorney General has reason to believe that any credit services business, or any salesperson, agent, representative, or independent contractor acting on behalf of a credit services business, has violated any provision of this subtitle, the Division may institute a proceeding under Title 13 of this article.
§ 14-1915. Fines and penalties
Currentness
(a) Except as provided in subsection (b) of this section, any person who violates any provision of this subtitle is guilty of a misdemeanor and, on conviction, is subject to a fine not exceeding $5,000 or imprisonment not exceeding 3 years or both, in addition to any civil penalties.
(b) A person may not be imprisoned for violation of any provision of an order of the Commissioner or of the Attorney General entered pursuant to this subtitle or Title 13 of this article.
§ 14-1916. Short title
Currentness
This subtitle may be cited as the “Maryland Credit Services Businesses Act”.

Credits

Added by Acts 1987, c. 469, § 1, eff. July 1, 1987.
 
 
MD Code, Commercial Law, § 14-1916, MD COML § 14-1916
Current through legislation effective through April 12, 2022, from the 2022 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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