{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-2040.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-2040.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-2040.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-2040.html"}],"law_id":56890,"edition_id":1,"section_id":56890,"structure_id":14206,"section_number":"6.2-2040","catch_line":"Licensees providing debt settlement services; prohibited and required business methods","history":"2020, c. 785.","full_text":"Each licensee engaged in the business of providing or offering to provide debt settlement services to any consumer shall comply with the following requirements:\n\n1\n\nEach debt settlement services agreement shall be evidenced by a written agreement, which shall be maintained in either a hard copy, including a faxed copy, or electronic version and which shall be signed by the consumer and a person authorized by the licensee to sign such agreements and dated the same day the debt settlement services agreement is executed by the consumer. The agreement may be signed by the parties either originally or by electronic signature. The agreement shall set forth, at a minimum, (i) the name and address of both the consumer and the licensee; (ii) a full description of all services to be performed for the consumer by the licensee; (iii) a clear explanation, highlighted in bold type, of the costs to the consumer; (iv) a statement that the debt settlement services agreement may be terminated for any reason by the consumer and that the consumer has no obligation to continue the arrangement unless satisfied with the services provided; (v) an explanation of the method of dispute resolution under the agreement; (vi) an explanation of the obligations of the consumer and the licensee that are subject to the agreement; and (vii) notification of privacy policies in compliance with state and federal laws and regulations.2\n\nA licensee shall give to the consumer a duplicate original of the agreement executed by the consumer and licensee upon full execution.3\n\nA licensee shall not request or receive payment or other compensation for any debt settlement services until and unless:\n\t\t\ta. The licensee has negotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a debt settlement services agreement it executed with a consumer; and\n\t\t\tb. The consumer has made at least one payment to a creditor following the licensee’s negotiation, settlement, reduction, or other alteration of at least one debt owned by the consumer to that creditor.4\n\nPrior to the execution of a debt settlement services agreement with a consumer, a licensee shall disclose to the consumer in writing, and retain a copy of, the following:\n\t\t\ta. The amount of time necessary to achieve the represented results and, to the extent that the services may include a settlement offer to any of the customer’s creditors or debt collectors, the time by which the licensee will make a bona fide settlement offer to each of them;\n\t\t\tb. To the extent that the services may include a settlement offer to any of the customer’s creditors or debt collectors, the amount of money or the percentage of each outstanding debt that the customer must accumulate before the licensee will make a bona fide settlement offer to each of them; and\n\t\t\tc. To the extent that any aspect of the debt settlement services relies upon or results in the consumer’s failure to make timely payments to creditors or debt collectors, that the use of the debt settlement services will likely adversely affect the consumer’s creditworthiness, may result in the consumer being subject to collections or sued by creditors or debt collectors, and may increase the amount of money the consumer owes due to the accrual of fees and interest.5\n\nA licensee shall not require a consumer to execute a power of attorney, as defined in § 64.2-1600, as a condition of receiving debt settlement services.6\n\nA licensee shall not require a consumer to open an account, as defined in § 6.2-604, as a condition of receiving debt settlement services. A licensee may request that a consumer open an account in connection with its provision of debt settlement services, provided that:\n\t\t\ta. The consumer’s funds are held in an account at an FDIC-insured financial institution;\n\t\t\tb. The consumer owns the funds held in the account and is paid accrued interest on the account, if any;\n\t\t\tc. The entity administering the account is not owned or controlled by, or in any way affiliated with, the debt settlement services provider;\n\t\t\td. The entity administering the account does not give or accept any money or other compensation in exchange for referrals of business involving the debt settlement services provider; and\n\t\t\te. The consumer may withdraw from the debt settlement services at any time without penalty and must receive all funds in the account, other than the fee earned by the debt settlement services provider for completed services, if any, subject to the limitations imposed in § 6.2-2041.7\n\nA licensee shall not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining an extension of credit or other service from a creditor, except for educational or counseling services required in connection with a government-sponsored program.","order_by":null,"text":{"0":{"id":208374,"text":"Each licensee engaged in the business of providing or offering to provide debt settlement services to any consumer shall comply with the following requirements:","type":"section","prefixes":[""],"prefix":"","entire_prefix":"","prefix_anchor":"","level":1,"next_prefix":"1"},"1":{"id":208375,"text":"Each debt settlement services agreement shall be evidenced by a written agreement, which shall be maintained in either a hard copy, including a faxed copy, or electronic version and which shall be signed by the consumer and a person authorized by the licensee to sign such agreements and dated the same day the debt settlement services agreement is executed by the consumer. The agreement may be signed by the parties either originally or by electronic signature. The agreement shall set forth, at a minimum, (i) the name and address of both the consumer and the licensee; (ii) a full description of all services to be performed for the consumer by the licensee; (iii) a clear explanation, highlighted in bold type, of the costs to the consumer; (iv) a statement that the debt settlement services agreement may be terminated for any reason by the consumer and that the consumer has no obligation to continue the arrangement unless satisfied with the services provided; (v) an explanation of the method of dispute resolution under the agreement; (vi) an explanation of the obligations of the consumer and the licensee that are subject to the agreement; and (vii) notification of privacy policies in compliance with state and federal laws and regulations.","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"","next_prefix":"2"},"2":{"id":208376,"text":"A licensee shall give to the consumer a duplicate original of the agreement executed by the consumer and licensee upon full execution.","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"3":{"id":208377,"text":"A licensee shall not request or receive payment or other compensation for any debt settlement services until and unless:\n\t\t\ta. The licensee has negotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a debt settlement services agreement it executed with a consumer; and\n\t\t\tb. The consumer has made at least one payment to a creditor following the licensee’s negotiation, settlement, reduction, or other alteration of at least one debt owned by the consumer to that creditor.","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"4":{"id":208378,"text":"Prior to the execution of a debt settlement services agreement with a consumer, a licensee shall disclose to the consumer in writing, and retain a copy of, the following:\n\t\t\ta. The amount of time necessary to achieve the represented results and, to the extent that the services may include a settlement offer to any of the customer’s creditors or debt collectors, the time by which the licensee will make a bona fide settlement offer to each of them;\n\t\t\tb. To the extent that the services may include a settlement offer to any of the customer’s creditors or debt collectors, the amount of money or the percentage of each outstanding debt that the customer must accumulate before the licensee will make a bona fide settlement offer to each of them; and\n\t\t\tc. To the extent that any aspect of the debt settlement services relies upon or results in the consumer’s failure to make timely payments to creditors or debt collectors, that the use of the debt settlement services will likely adversely affect the consumer’s creditworthiness, may result in the consumer being subject to collections or sued by creditors or debt collectors, and may increase the amount of money the consumer owes due to the accrual of fees and interest.","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"5":{"id":208379,"text":"A licensee shall not require a consumer to execute a power of attorney, as defined in § 64.2-1600, as a condition of receiving debt settlement services.","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"6"},"6":{"id":208380,"text":"A licensee shall not require a consumer to open an account, as defined in § 6.2-604, as a condition of receiving debt settlement services. A licensee may request that a consumer open an account in connection with its provision of debt settlement services, provided that:\n\t\t\ta. The consumer’s funds are held in an account at an FDIC-insured financial institution;\n\t\t\tb. The consumer owns the funds held in the account and is paid accrued interest on the account, if any;\n\t\t\tc. The entity administering the account is not owned or controlled by, or in any way affiliated with, the debt settlement services provider;\n\t\t\td. The entity administering the account does not give or accept any money or other compensation in exchange for referrals of business involving the debt settlement services provider; and\n\t\t\te. The consumer may withdraw from the debt settlement services at any time without penalty and must receive all funds in the account, other than the fee earned by the debt settlement services provider for completed services, if any, subject to the limitations imposed in § 6.2-2041.","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5","next_prefix":"7"},"7":{"id":208381,"text":"A licensee shall not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining an extension of credit or other service from a creditor, except for educational or counseling services required in connection with a government-sponsored program.","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6"}},"ancestry":[{"id":14206,"edition_id":1,"name":"Debt Settlement Services Providers","identifier":"20.1","label":"chapter","depth":3,"order_by":1,"parent_id":13060,"metadata":{},"date_created":"2026-06-26 03:47:16","date_modified":"2026-06-26 03:47:16","permalink":{"id":266731,"object_type":"structure","relational_id":14206,"identifier":"20.1","token":"6.2\/III\/20.1","url":"\/6.2\/III\/20.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13060,"edition_id":1,"name":"Other Regulated Providers of Financial Services","identifier":"III","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:44:12","date_modified":"2026-06-26 03:44:12","permalink":{"id":265721,"object_type":"structure","relational_id":13060,"identifier":"III","token":"6.2\/III","url":"\/6.2\/III\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":76223,"structure_id":14206,"section_number":"6.2-2026","catch_line":"Definitions","url":"\/6.2-2026\/","token":"6.2\/III\/20.1\/6.2-2026","metadata":false},{"id":55395,"structure_id":14206,"section_number":"6.2-2027","catch_line":"License requirement; exceptions","url":"\/6.2-2027\/","token":"6.2\/III\/20.1\/6.2-2027","metadata":false},{"id":70448,"structure_id":14206,"section_number":"6.2-2028","catch_line":"Application for license; form; content; fee","url":"\/6.2-2028\/","token":"6.2\/III\/20.1\/6.2-2028","metadata":false},{"id":83350,"structure_id":14206,"section_number":"6.2-2029","catch_line":"Bond required","url":"\/6.2-2029\/","token":"6.2\/III\/20.1\/6.2-2029","metadata":false},{"id":58352,"structure_id":14206,"section_number":"6.2-2030","catch_line":"Investigation of applications","url":"\/6.2-2030\/","token":"6.2\/III\/20.1\/6.2-2030","metadata":false},{"id":67583,"structure_id":14206,"section_number":"6.2-2031","catch_line":"Qualifications","url":"\/6.2-2031\/","token":"6.2\/III\/20.1\/6.2-2031","metadata":false},{"id":63306,"structure_id":14206,"section_number":"6.2-2032","catch_line":"Licenses; places of business; changes","url":"\/6.2-2032\/","token":"6.2\/III\/20.1\/6.2-2032","metadata":false},{"id":80384,"structure_id":14206,"section_number":"6.2-2033","catch_line":"Acquisition of control; application","url":"\/6.2-2033\/","token":"6.2\/III\/20.1\/6.2-2033","metadata":false},{"id":87030,"structure_id":14206,"section_number":"6.2-2034","catch_line":"Retention of books, accounts, and records; responding to Bureau","url":"\/6.2-2034\/","token":"6.2\/III\/20.1\/6.2-2034","metadata":false},{"id":83844,"structure_id":14206,"section_number":"6.2-2035","catch_line":"Annual report","url":"\/6.2-2035\/","token":"6.2\/III\/20.1\/6.2-2035","metadata":false},{"id":85989,"structure_id":14206,"section_number":"6.2-2036","catch_line":"Other reporting requirements","url":"\/6.2-2036\/","token":"6.2\/III\/20.1\/6.2-2036","metadata":false},{"id":79999,"structure_id":14206,"section_number":"6.2-2037","catch_line":"Investigations; examinations","url":"\/6.2-2037\/","token":"6.2\/III\/20.1\/6.2-2037","metadata":false},{"id":80270,"structure_id":14206,"section_number":"6.2-2038","catch_line":"Annual fees","url":"\/6.2-2038\/","token":"6.2\/III\/20.1\/6.2-2038","metadata":false},{"id":82260,"structure_id":14206,"section_number":"6.2-2039","catch_line":"Regulations","url":"\/6.2-2039\/","token":"6.2\/III\/20.1\/6.2-2039","metadata":false},{"id":56890,"structure_id":14206,"section_number":"6.2-2040","catch_line":"Licensees providing debt settlement services; prohibited and required business methods","url":"\/6.2-2040\/","token":"6.2\/III\/20.1\/6.2-2040","metadata":false},{"id":81637,"structure_id":14206,"section_number":"6.2-2041","catch_line":"Fee","url":"\/6.2-2041\/","token":"6.2\/III\/20.1\/6.2-2041","metadata":false},{"id":66000,"structure_id":14206,"section_number":"6.2-2042","catch_line":"Advertising","url":"\/6.2-2042\/","token":"6.2\/III\/20.1\/6.2-2042","metadata":false},{"id":57456,"structure_id":14206,"section_number":"6.2-2043","catch_line":"Suspension or revocation of license","url":"\/6.2-2043\/","token":"6.2\/III\/20.1\/6.2-2043","metadata":false},{"id":85206,"structure_id":14206,"section_number":"6.2-2044","catch_line":"Cease and desist orders","url":"\/6.2-2044\/","token":"6.2\/III\/20.1\/6.2-2044","metadata":false},{"id":65724,"structure_id":14206,"section_number":"6.2-2045","catch_line":"Notice of proposed suspension or revocation","url":"\/6.2-2045\/","token":"6.2\/III\/20.1\/6.2-2045","metadata":false},{"id":64784,"structure_id":14206,"section_number":"6.2-2046","catch_line":"Civil penalties","url":"\/6.2-2046\/","token":"6.2\/III\/20.1\/6.2-2046","metadata":false},{"id":76198,"structure_id":14206,"section_number":"6.2-2047","catch_line":"Criminal penalty","url":"\/6.2-2047\/","token":"6.2\/III\/20.1\/6.2-2047","metadata":false},{"id":76935,"structure_id":14206,"section_number":"6.2-2048","catch_line":"Private right of action","url":"\/6.2-2048\/","token":"6.2\/III\/20.1\/6.2-2048","metadata":false},{"id":64822,"structure_id":14206,"section_number":"6.2-2049","catch_line":"Authority of Attorney General; referral by Commission to Attorney General","url":"\/6.2-2049\/","token":"6.2\/III\/20.1\/6.2-2049","metadata":false},{"id":83927,"structure_id":14206,"section_number":"6.2-2050","catch_line":"Violation of the Virginia Consumer Protection Act","url":"\/6.2-2050\/","token":"6.2\/III\/20.1\/6.2-2050","metadata":false}],"previous_section":{"id":82260,"structure_id":14206,"section_number":"6.2-2039","catch_line":"Regulations","url":"\/6.2-2039\/","token":"6.2\/III\/20.1\/6.2-2039","metadata":false},"next_section":{"id":81637,"structure_id":14206,"section_number":"6.2-2041","catch_line":"Fee","url":"\/6.2-2041\/","token":"6.2\/III\/20.1\/6.2-2041","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-2040\/","history_text":"

This law was first created in 2020. The record of its establishment is cataloged in chapter 785<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year.<\/p>","references":false,"refers_to":[{"id":83499,"section_number":"6.2-604","catch_line":"Definitions","order_by":null,"url":"\/6.2-604\/"},{"id":68410,"section_number":"64.2-1600","catch_line":"Definitions","order_by":null,"url":"\/64.2-1600\/"}],"permalink":{"id":266789,"object_type":"law","relational_id":56890,"identifier":"6.2-2040","token":"6.2\/III\/20.1\/6.2-2040","url":"\/6.2-2040\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-2040\/","token":"6.2\/III\/20.1\/6.2-2040","dublin_core":{"Title":"Licensees providing debt settlement services; prohibited and required business methods","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-2040","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

Each licensee<\/span> engaged in the business of providing or offering to provide debt settlement services<\/span> to any consumer<\/span> shall comply with the following requirements:<\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Each debt settlement services<\/span> agreement shall be evidenced by a written agreement, which shall be maintained in either a hard copy, including a faxed copy, or electronic version and which shall be signed by the consumer<\/span> and a person<\/span> authorized by the licensee<\/span> to sign such agreements and dated the same day the debt settlement services<\/span> agreement is executed by the consumer<\/span>. The agreement may be signed by the parties either originally or by electronic signature<\/span>. The agreement shall set forth, at a minimum, (i) the name and address of both the consumer<\/span> and the licensee<\/span>; (ii) a full description of all services to be performed for the consumer<\/span> by the licensee<\/span>; (iii) a clear explanation, highlighted in bold type, of the costs to the consumer<\/span>; (iv) a statement that the debt settlement services<\/span> agreement may be terminated for any reason by the consumer<\/span> and that the consumer<\/span> has no obligation to continue the arrangement unless satisfied with the services provided; (v) an explanation of the method of dispute resolution under the agreement; (vi) an explanation of the obligations of the consumer<\/span> and the licensee<\/span> that are subject to the agreement; and (vii) notification of privacy policies in compliance with state and federal laws<\/span> and regulations. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A licensee<\/span> shall give to the consumer<\/span> a duplicate original<\/span> of the agreement executed by the consumer<\/span> and licensee<\/span> upon full execution. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> A licensee<\/span> shall not request or receive payment or other compensation for any debt settlement services<\/span> until and unless:\n\t\t\ta. The licensee<\/span> has negotiated, settled, reduced, or otherwise altered the terms of at least one debt pursuant to a debt settlement services<\/span> agreement it executed with a consumer<\/span>; and\n\t\t\tb. The consumer<\/span> has made at least one payment to a creditor<\/span> following the licensee<\/span>’s negotiation, settlement, reduction, or other alteration of at least one debt owned by the consumer<\/span> to that creditor<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Prior to the execution of a debt settlement services<\/span> agreement with a consumer<\/span>, a licensee<\/span> shall disclose to the consumer<\/span> in writing, and retain a copy of, the following:\n\t\t\ta. The amount of time necessary to achieve the represented results and, to the extent that the services may include a settlement offer to any of the customer’s creditors<\/span> or debt collectors<\/span>, the time by which the licensee<\/span> will make a bona fide settlement offer to each of them;\n\t\t\tb. To the extent that the services may include a settlement offer to any of the customer’s creditors<\/span> or debt collectors<\/span>, the amount of money or the percentage of each outstanding debt that the customer must accumulate before the licensee<\/span> will make a bona fide settlement offer to each of them; and\n\t\t\tc. To the extent that any aspect of the debt settlement services<\/span> relies upon or results in the consumer<\/span>’s failure to make timely payments to creditors<\/span> or debt collectors<\/span>, that the use of the debt settlement services<\/span> will likely adversely affect the consumer<\/span>’s creditworthiness, may result in the consumer<\/span> being subject to collections or sued by creditors<\/span> or debt collectors<\/span>, and may increase the amount of money the consumer<\/span> owes due to the accrual of fees and interest. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> A licensee<\/span> shall not require a consumer<\/span> to execute a power of attorney<\/span>, as defined in § 64.2-1600<\/a>, as a condition of receiving debt settlement services<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> A licensee<\/span> shall not require a consumer<\/span> to open an account, as defined in § 6.2-604<\/a>, as a condition of receiving debt settlement services<\/span>. A licensee<\/span> may request that a consumer<\/span> open an account in connection with its provision of debt settlement services<\/span>, provided that:\n\t\t\ta. The consumer<\/span>’s funds are held in an account at an FDIC-insured financial institution<\/span>;\n\t\t\tb. The consumer<\/span> owns the funds held in the account and is paid accrued interest on the account, if any;\n\t\t\tc. The entity<\/span> administering the account is not owned or controlled by, or in any way affiliated with, the debt settlement services<\/span> provider;\n\t\t\td. The entity<\/span> administering the account does not give or accept any money or other compensation in exchange for referrals of business involving the debt settlement services<\/span> provider; and\n\t\t\te. The consumer<\/span> may withdraw from the debt settlement services<\/span> at any time without penalty<\/span> and must receive all funds in the account, other than the fee earned by the debt settlement services<\/span> provider for completed services, if any, subject to the limitations imposed in § 6.2-2041<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> A licensee<\/span> shall not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining an extension of credit or other service from a creditor<\/span>, except for educational or counseling services required in connection with a government-sponsored program. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nLICENSEES PROVIDING DEBT SETTLEMENT SERVICES; PROHIBITED AND REQUIRED BUSINESS\nMETHODS (\u00a7 6.2-2040)\n\nEach licensee engaged in the business of providing or offering to provide debt\nsettlement services to any consumer shall comply with the following\nrequirements:\n\n1. Each debt settlement services agreement shall be evidenced by a written\nagreement, which shall be maintained in either a hard copy, including a faxed\ncopy, or electronic version and which shall be signed by the consumer and a\nperson authorized by the licensee to sign such agreements and dated the same day\nthe debt settlement services agreement is executed by the consumer. The\nagreement may be signed by the parties either originally or by electronic\nsignature. The agreement shall set forth, at a minimum, (i) the name and address\nof both the consumer and the licensee; (ii) a full description of all services\nto be performed for the consumer by the licensee; (iii) a clear explanation,\nhighlighted in bold type, of the costs to the consumer; (iv) a statement that\nthe debt settlement services agreement may be terminated for any reason by the\nconsumer and that the consumer has no obligation to continue the arrangement\nunless satisfied with the services provided; (v) an explanation of the method of\ndispute resolution under the agreement; (vi) an explanation of the obligations\nof the consumer and the licensee that are subject to the agreement; and (vii)\nnotification of privacy policies in compliance with state and federal laws and\nregulations.\n\n2. A licensee shall give to the consumer a duplicate original of the agreement\nexecuted by the consumer and licensee upon full execution.\n\n3. A licensee shall not request or receive payment or other compensation for any\ndebt settlement services until and unless:\n\t\t\ta. The licensee has negotiated, settled, reduced, or otherwise altered the\nterms of at least one debt pursuant to a debt settlement services agreement it\nexecuted with a consumer; and\n\t\t\tb. The consumer has made at least one payment to a creditor following the\nlicensee’s negotiation, settlement, reduction, or other alteration of at\nleast one debt owned by the consumer to that creditor.\n\n4. Prior to the execution of a debt settlement services agreement with a\nconsumer, a licensee shall disclose to the consumer in writing, and retain a\ncopy of, the following:\n\t\t\ta. The amount of time necessary to achieve the represented results and, to\nthe extent that the services may include a settlement offer to any of the\ncustomer’s creditors or debt collectors, the time by which the licensee\nwill make a bona fide settlement offer to each of them;\n\t\t\tb. To the extent that the services may include a settlement offer to any of\nthe customer’s creditors or debt collectors, the amount of money or the\npercentage of each outstanding debt that the customer must accumulate before the\nlicensee will make a bona fide settlement offer to each of them; and\n\t\t\tc. To the extent that any aspect of the debt settlement services relies upon\nor results in the consumer’s failure to make timely payments to creditors\nor debt collectors, that the use of the debt settlement services will likely\nadversely affect the consumer’s creditworthiness, may result in the\nconsumer being subject to collections or sued by creditors or debt collectors,\nand may increase the amount of money the consumer owes due to the accrual of\nfees and interest.\n\n5. A licensee shall not require a consumer to execute a power of attorney, as\ndefined in § 64.2-1600, as a condition of receiving debt settlement\nservices.\n\n6. A licensee shall not require a consumer to open an account, as defined in\n§ 6.2-604, as a condition of receiving debt settlement services. A licensee\nmay request that a consumer open an account in connection with its provision of\ndebt settlement services, provided that:\n\t\t\ta. The consumer’s funds are held in an account at an FDIC-insured\nfinancial institution;\n\t\t\tb. The consumer owns the funds held in the account and is paid accrued\ninterest on the account, if any;\n\t\t\tc. The entity administering the account is not owned or controlled by, or in\nany way affiliated with, the debt settlement services provider;\n\t\t\td. The entity administering the account does not give or accept any money or\nother compensation in exchange for referrals of business involving the debt\nsettlement services provider; and\n\t\t\te. The consumer may withdraw from the debt settlement services at any time\nwithout penalty and must receive all funds in the account, other than the fee\nearned by the debt settlement services provider for completed services, if any,\nsubject to the limitations imposed in § 6.2-2041.\n\n7. A licensee shall not receive a gift or bonus, premium, reward, or other\ncompensation, directly or indirectly, for advising, arranging, or assisting an\nindividual in connection with obtaining an extension of credit or other service\nfrom a creditor, except for educational or counseling services required in\nconnection with a government-sponsored program.\n\nHISTORY: 2020, c. 785.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}