A credit services organization and its salespersons, agents, representatives, and independent contractors who sell or attempt to sell the services of a credit services organization shall not do any of the following:

(a) Charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit services organization has agreed to perform for or on behalf of the consumer.

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(b) Fail to perform the agreed services within 180 days following the date the consumer signs the contract for those services.

(c) Fail to provide a monthly statement to the consumer detailing the services performed.

(d) Charge or receive any money or other valuable consideration for referral of the consumer to a retail seller or other credit grantor who will or may extend credit to the consumer, if either of the following apply:

(1) The credit that is or will be extended to the consumer (A) is upon substantially the same terms as those available to the general public or (B) is upon substantially the same terms that would have been extended to the consumer without the assistance of the credit services organization.

(2) The money or consideration is paid by the credit grantor or is derived from the consumer’s payments to the credit grantor for costs, fees, finance charges, or principal.

(e) Make, or counsel or advise a consumer to make, a statement that is untrue or misleading and that is known, or that by the exercise of reasonable care should be known, to be untrue or misleading, to a consumer credit reporting agency or to a person who has extended credit to a consumer, to a data furnisher, or to any person with whom a consumer is applying for an extension of credit, such as statements concerning a consumer’s identification, home address, creditworthiness, credit standing, or credit capacity.

(f) Remove, or assist or advise the consumer to remove, adverse information from the consumer’s credit record that is accurate or not obsolete.

(g) Create, or assist or advise the consumer to create, a new credit record by using a different name, address, social security number, or employee identification number.

(h) Make or use untrue or misleading representations in the offer or sale of the services of a credit services organization, including either of the following:

(1) Guaranteeing or otherwise stating that the credit services organization is able to delete an adverse credit history, unless the representation clearly discloses, in a manner equally as conspicuous as the guarantee, that this can be done only if the credit history is inaccurate or obsolete and is not claimed to be accurate by the creditor who submitted the information.

(2) Guaranteeing or otherwise stating that the credit services organization is able to obtain an extension of credit, regardless of the consumer’s previous credit problems or credit history, unless the representation clearly discloses, in a manner equally as conspicuous as the guarantee, the eligibility requirements for obtaining an extension of credit.

(i) Engage, directly or indirectly, in an act, practice, or course of business that operates or would operate as a fraud or deception upon a person in connection with the offer or sale of the services of a credit services organization.

(j) Advertise or cause to be advertised, in any manner, the services of the credit services organization, without being registered with the Department of Justice.

(k) Fail to maintain an agent for service of process in this state.

(l) Transfer or assign its certificate of registration.

(m) Call or submit any communication to a consumer credit reporting agency, creditor, debt collector, or debt buyer without the prior written authorization of the consumer. A relevant authorization in the agreement or contract between a consumer and a credit services organization is sufficient for the purpose of this subdivision.

(n) Submit a consumer’s dispute to a consumer credit reporting agency, creditor, debt collector, or debt buyer more than 180 days after the account subject to the dispute has been removed from the consumer’s credit report.

(o) Use the online electronic portal, electronic mail system, or telephone system of a consumer credit reporting agency, creditor, debt collector, or debt buyer to submit a dispute of a consumer or to request disclosure without the prior written authorization of the consumer. A relevant authorization in the agreement or contract between a consumer and a credit services organization is sufficient for the purpose of this subdivision.

(p) Directly or indirectly extend credit to a consumer.

(q) Refer a consumer to a credit grantor that is related to the credit services organization by a common ownership, management, or control, including a common owner, director, or officer.

(r) Refer a consumer to a credit grantor for which the credit services organization provides, or arranges for a third party to provide, services related to the extension of credit such as underwriting, billing, payment processing, or debt collection.

(s) Provide a credit grantor with an assurance that a portion of an extension of credit to a consumer referred by the credit services organization will be repaid, including providing a guaranty, letter of credit, or agreement to acquire a part of the credit grantor’s financial interest in the extension of credit.

(t) Use a scheme, device, or contrivance to evade the prohibitions contained in this section.

(u) Fail to make a written communication sent on behalf of a consumer to any credit reporting agency, data furnisher, or legal counsel for either of the foregoing available to the consumer.

(v) Fail to provide along with its first written communication to a credit reporting agency or data furnisher any sufficient information to investigate an account.

(w) The seeking to obtain, or the obtaining of, a consumer’s credit report and the performance of other services necessary to determine the needs of a consumer for the reinvestigation of any accounts shall not constitute services of a credit services organization for which a contract is required pursuant to subdivision (a) of Section 1789.16, if that activity is undertaken with the consumer’s prior written, electronic, or recorded oral consent.

(Amended by Stats. 2022, Ch. 965, Sec. 3. (AB 2424) Effective January 1, 2023.)