Arizona Laws 44-1708. Surety bond; procedures to obtain or establish; claim by action at law; limit of liability
A. If a credit services organization is required to obtain a surety bond pursuant to section 44-1703, the following procedures apply:
Terms Used In Arizona Laws 44-1708
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Credit services organization: means a person who, with respect to the extension of credit by others, sells, provides, performs or represents that he can or will sell, provide or perform any of the following services in return for the payment of monies or other valuable consideration:
(a) Improving a buyer's credit record, history or rating. See Arizona Laws 44-1701
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Month: means a calendar month unless otherwise expressed. See Arizona Laws 1-215
- Person: means an individual, partnership, corporation, association, or any other entity of whatever kind or nature. See Arizona Laws 44-1691
1. A copy of the bond shall be filed with the corporation commission.
2. The bond required shall be in favor of this state for the benefit of any person who is damaged by any violation of this article. The bond shall also be in favor of any person damaged by the practices.
3. A person claiming against the bond for a violation of this article may maintain an action at law against the credit services organization and against the surety.
B. The surety is liable only for actual damages and not the punitive damages permitted under section 44-1711. The aggregate liability of the surety to all persons damaged by a credit services organization’s violation of this article shall in no event exceed the amount of the bond.
C. The bond shall be in an amount equal to five per cent of the total amount of the fees charged buyers by the credit services organization under the contracts entered into between the credit services organization and the buyers during the previous twelve months, but in no case shall the bond be less than five thousand dollars or more than twenty-five thousand dollars. The amount required shall be adjusted once a year, no later than the tenth day of the first month of the credit services organization’s fiscal year.