title-6•6 Del. Admin. Code — Attorney General's Office
Fraud and Consumer Protection Division Fraud and Consumer Protection Division
Consumer Protection Unit Consumer Protection Unit
101 Identity Theft Passports
6 Del. Admin. Code § 101 Identity Theft Passports
101 Identity Theft Passports
1.0 Scope
1.1 An identity theft passport is available to a person who is a victim of identity theft as defined in 11 Del.C. §854 and who has filed a police report with a law enforcement agency in this State.
1.2 A law enforcement agency with jurisdiction over the residence of the victim shall take a report from a person who knows or reasonable believes that he or she has been the victim of identity theft. 6 Del.C. §2204(a).
1.3 An identity theft passport is not available for identity mistake or loss of documents containing identifying information.
2.0 Application
2.1 A victim may request an application from the Office of the Attorney General, 820 N. French St. 5th Floor Wilmington, DE 19801, from the police agency taking the report, or online at http://www.state.de.us/attgen/default.shtml
2.2 The application will contain at a minimum:
2.2.1 The name, gender, date of birth, place of birth, address, and phone number of the applicant;
2.2.2 the county and state where the theft occurred;
2.2.3 a description of the identity theft incident;
2.2.4 the identity of the person who stole the information, if known;
2.2.5 the signature and certification of the applicant; and
2.2.6 any other information deemed necessary by the Attorney General.
2.3 The police agency that takes the police report is responsible for transmitting the report and the application to the Attorney General for further processing.
3.0 Qualification
3.1 A designee of the Attorney General will review the application, police report, and any other information necessary to determine whether he or she is reasonably assured that the identity theft claim is legitimate and adequately substantiated.
3.1.1 Documents that may substantiate a claim of identity theft include, but are not limited to:
3.1.1.1 receipts or bills from creditors showing unauthorized use of a credit card;
3.1.1.2 utility accounts created using the applicant’s name without permission;
3.1.1.3 fraudulent checks or bank statements; or
3.1.1.4 any other evidence that the applicant’s identity has been used without consent to commit or facilitate a crime prohibited in Title 11 of the Delaware Code.
3.2 Only police reports submitted by a Delaware law enforcement agency will support an application for an identity theft passport.
3.3 An applicant who is approved will be issued the identity theft passport by the Attorney General.
4.0 Use of the Identity Theft Passport
4.1 An identity theft passport can be presented as follows:
4.1.1 to a law enforcement agency to help prevent the victim’s arrest or detention for an offense committed by someone using the victim’s identity;
4.1.2 to any of the victim’s creditors to aid in a creditor’s investigation and establishment of whether fraudulent charges were made using the victim’s account(s);
4.1.3 to a consumer reporting agency as defined in the Fair Credit Reporting Act which must accept the passport as an official notice of a dispute and must include notice of the dispute in all future reports that contain disputed information caused by the identity theft.
4.2 Acceptance or rejection of the passport presented to a law enforcement agency or credit as provided in 4.1.1 and 4.1.2 is at the discretion of the law enforcement agency or creditor.
5.0 Changes
5.1 Name or address changes shall be reported promptly to the Consumer Protection Unit, Office of the Attorney General, 820 N. French Street 5th floor, Carvel State Office Building, Wilmington, DE 19801.
5.2 The identity theft passport shall be returned to the above location and a new passport will be issued with the new information.
6.0 Lost or Stolen Passports
6.1 A person who is issued an identity theft passport shall immediately notify the Consumer Protection Unit of the Office of the Attorney General if the passport is lost or stolen.
6.2 The lost or stolen passport will be replaced upon proper application.
7.0 Expiration
7.1 An identity theft passport will expire three years after it was originally issued.
7.2 An identity theft passport may be renewed if there are continuing detrimental effects of the identity theft that may be mitigated by the renewal of the passport.
10 DE Reg. 1151 (01/01/07)
102 Debt Management Services
6 Del. Admin. Code § 102 Debt Management Services
102 Debt Management Services
1.0 Definitions
1.1 The following terms are defined in 6 Del.C. §2402A and have the same meaning when used in these rules.
“affiliate”
“agreement”
“bank”
“business address”
“certified counselor”
“Attorney General”
“Concessions”
“Day”
“Debt-management services”
“Entity”
“Good faith”
“Person”
“Plan”
“Principal amount of debt”
“Provider”
“Record”
“Settlement fee”
“Sign”
“State”
“Trust account”
1.2 The following terms used herein mean:
1.2.1 “Accreditation” means certified as meeting a prescribed standard.
1.2.2 “Administrative Procedures Act” or "APA" means 29 Del.C. Chapter 101.
1.2.3 “Consumer Protection Unit” or "Consumer Protection Division" means the section of the Department of Justice established under 29 Del.C. §2517.
1.2.4 “Debt Management Services” as defined in 6 Del.C. §2402(9) include, but are not limited to, debt negotiation and settlement.
1.2.5 “Delaware Uniform Debt Management Services Act” or "Act" means the provisions in Chapter 24A of Title 6 of the Delaware Code.
1.2.6 “Director” means the Deputy Attorney General assigned as head of the Consumer Protection Unit.
1.2.7 “Hearing Officer” means an attorney assigned to conduct an administrative hearing.
2.0 Applicability
2.1 A provider of debt management services is not required to be licensed under the Delaware Uniform Debt Management Services Act if the provider:
2.1.1 has no reason to know the individual receiving services by agreement resides in Delaware; or
2.1.2 receives no compensation from the individual receiving services or a creditor of that individual.
2.2 Debt management services do not include:
2.2.1 legal services provided by an attorney authorized to practice law in Delaware and in an attorney-client relationship or
2.2.1.1 The exclusion for legal services applies only when there is an attorney-client relationship. If an out of State firm is providing legal services in association with a licensed Delaware attorney, the Delaware attorney must be identified in the debt management agreement which shall include the Delaware attorney's address and phone number.
2.2.2 accounting services provided by a certified public accountant licensed to provide accounting services in Delaware and in an accountant-client relationship.
2.2.3 services provided within the scope of the business or profession by
2.2.3.1 a judicial officer; or person acting under court or administrative order;
2.2.3.2 an assignee for the benefit of creditors;
2.2.3.3 a bank or government regulated bank affiliate;
2.2.3.4 a title insurer, an escrow company, or a person providing bill paying services if the provision of debt-management services is incidental to the bill-paying services.
2.3 The person forming an agreement to provide debt management services and any person to whom the account is then transferred are providers subject to the provisions of the Act.
11 DE Reg. 1062 (02/01/08)
3.0 Administration
3.1 The Consumer Protection Unit of the Fraud and Consumer Protection Division is designated by the Attorney General to administer the Delaware Uniform Debt Management Services Act in Chapter 24A of Title 6 of the Delaware Code.
3.1.1 The address of the Consumer Protection Unit is 820 N. French St., Fifth Floor, Wilmington, DE 19801. The phone number is (302) 577-8600 or (800) 220-5424 (in Delaware).
3.1.2 The address for the Attorney General on the internet is http://attorneygeneral.delaware.gov
3.1.3 Business hours are 8:30 to 5:00 p.m. Mondays through Fridays excluding legal State holidays as defined in 1 Del.C. §501.
3.2 Copies of the law and rules are available by contacting the office above or from the web site.
3.3 Applicants are required to read and comply with the law and the rules. The rules are intended to be explanatory and do not contain all of the details found in the law.
11 DE Reg. 1062 (02/01/08)
14 DE Reg. 318 (10/01/10)
4.0 Applications
4.1 Applications for licensure shall be submitted on forms approved by the Director of the Consumer Protection Unit. Application forms will be mailed to an applicant upon request and are also available in person or through the web site at the addresses provided in Rule 3.1.
4.2 Applications must be complete before they are submitted for consideration. Incomplete applications may be denied or returned to the applicant. Applications shall include:
4.2.1 An audited review by a certified accountant of the applicant's financial statements for the two years preceding the application or the period of existence, whichever is less. 6 Del.C. §2406A (8).
4.2.2 At the applicant's expense, the results of a criminal history record check, including fingerprints, provided pursuant to the Federal Bureau of Investigation appropriation of Title II of Public Law 92-544 (28 U.S.C. §534) and 28 C.F.R. §50.12., conducted within the last 12 months for every officer of the applicant and every employee with access to the trust account.
4.2.2.1 The applicant may request sufficient fingerprint cards and authorization forms from the Consumer Protection Unit of the Delaware Attorney General's Office for the individuals needing criminal records checks. The cards can then be taken to a local law enforcement agency for fingerprinting. The completed cards and authorizations shall be returned to the Consumer Protection Unit for further processing by the Delaware Bureau of Identification.
4.2.2.2 The Delaware Bureau of Identification shall be the intermediary and the Office of the Attorney General of Delaware - Consumer Protection Unit shall be the screening point for the receipt of the federal criminal history records.
4.2.2.3 A license will not be denied based on the information contained in an FBI identification record until a person has a reasonable time to correct or complete the record, or has declined to do so. Procedures for obtaining a change, correction or updating an FBI identification record are set forth in 28 C.F.R. §50.12.
4.2.2.4 A criminal records check obtained for the purpose of doing business in any state, that was issued within the last 12 months and based on the fingerprints of the officer or person with access to the trust account, satisfies this requirement if the criminal records check is provided by the licensing state and received by that state from a central repository.
4.2.2.5 The criminal records check of an individual obtained for licensure in Delaware will be provided to another State regulator only with the express written consent of the individual.
4.2.3 A corporate surety bond on the form provided in an amount of at least $50,000 from a surety company authorized to do business in Delaware (or an irrevocable letter of credit with the consent of the Attorney General) as provided in 6 Del.C. §§2405A(b)(2), 2413A, and 2414A.
4.2.3.1 The amount of the bond may be required to be increased after consideration of the value of the applicant's business in Delaware and the balance of the trust account.
4.2.3.2 The term of the bond is continuous.
4.2.3.3 The bond shall run to the State for the benefit of the Attorney General and consumers injured by any wrongful act, omission, default, fraud or misrepresentation by the applicant.
4.2.3.4 If the bond is amended, the licensee shall provide an amended copy of the original security bond to the Director of the Consumer Protection Unit of the Attorney General's Office.
4.2.3.5 No cancellation of a bond by the surety shall be effective unless written notice of an intent to cancel is filed with the Director of the Consumer Protection Unit of the Attorney General's Office at least 30 days before the effective date of cancellation.
4.2.3.6 A surety company that receives a claim against the bond shall immediately notify the Director of the Consumer Protection Unit of the Attorney General's Office. No payment shall be made without the approval of the Director of the Consumer Protection Unit of the Attorney General's Office.
4.2.4 Evidence of insurance against the risks of dishonesty, fraud, theft, and other misconduct on the part of the applicant or a director, employee, or agent of the applicant in the amount of $250,000. The evidence shall identify any exclusions from coverage and include all endorsements related to Delaware. 6 Del.C. §2405A(b)(4).
4.2.4.1 Insurer must be authorized to do business in the State of Delaware and be rated at least A by a nationally recognized rating organization.
4.2.4.2 The deductible shall be no greater than $5,000.
4.2.4.3 The Attorney General shall be named as an interested party to receive timely notice of cancellation.
4.2.5 Identification of trust accounts and an irrevocable consent permitting the Attorney General and/or the designee(s) of the Attorney General to review and examine accounts. 6 Del.C. §§2405A(b)(3) and 2422A.
4.2.6 Evidence of accreditation by an independent accrediting organization approved by the Director of the Consumer Protection Unit of the Attorney General's Office that assures compliance with industry standards. A list of organizations that have been approved can be found on the website provided in Rule 3.1.2 or obtained by contacting the Consumer Protection Unit.
4.2.7 Documentation of counselor certifications or a statement that a counselor will become certified within 12 months of employment. Certification shall be by a bona fide third-party provider approved by the Director of the Consumer Protection Unit of the Attorney General's Office. Documentation can be in a log or other record of counselors, their certifications, and dates of certification. A list of organizations or programs that have been approved can be found on the website provided in Rule 3.1.2 or obtained by contacting the Consumer Protection Unit.
4.2.8 A description of the three most common educational programs provided for Delaware residents and a copy of the materials. 6 Del.C. §2406A(11).
4.2.8.1 An educational program must include material on financial literacy, personal finance, and budgeting.
4.2.9 A description of the financial analysis and initial budget plan including any form or electronic model used to evaluate the financial conditions of individuals. 6 Del.C. §2406A(2).
4.2.10 A copy of each form of agreement used with Delaware residents. 6 Del.C. §2406A(13).
4.2.11 A schedule of all fees, including any recommended donations, used with Delaware residents. 6 Del.C. §2406A(14).
4.2.11.1 If a plan contemplates that creditors will reduce finance charges or fees for late payment, default, or delinquency, the provider may charge an initial fee of up to $50 and a monthly service fee not to exceed $10 times the number of creditors in the plan when the fee is assessed, but not more than $50 in any month.
4.2.11.2 If a plan or program contemplates settling a debt for less than the principal amount of the debt, the provider may charge a non-refundable initial fee that represents the value of obtaining a credit report and consultation.
4.2.11.2.1 Each plan or program payment may include a reasonable monthly service fee and must include an amount designated for the settlement fund to pay the creditors following a negotiated settlement.
4.2.11.2.2 The settlement fee, which represents the compensation for services in connection with settling a debt, paid to the provider cannot exceed 18% of the principal amount of the debt including the initial fee and monthly service fees.
4.2.11.2.3 The settlement fee may be collected in installments over the expected length of the program but in no event shall the final installment be due before the conclusion of the program either by termination or by settlement of all debts included in the program.
4.2.12 The application fee in the amount of $2000. 6 Del.C. §2405A(b)(1).
4.2.13 An applicant submitting an application that does not satisfy the statutory or regulatory requirements may receive one or more deficiency letters and have an opportunity to submit additional or modified information. If there is no response to a deficiency letter within 90 days of its mailing, the application is incomplete and may be administratively closed after notice to the applicant. Any new application requires a new fee as provided in 4.1.12. Nothing herein shall impair the authority of the Director to deny an erroneous or incomplete application.
4.3 The Director of the Consumer Protection Unit:
4.3.1 will make a preliminary decision on a completed application within 120 days unless additional information is needed. In that case, the period is extended by 60 days.
4.3.2 may deny a license application for any of the reasons in 6 Del.C. §2409A(b) including:
4.3.2.1 the application contains information that is materially erroneous or incomplete;
4.3.2.2 an officer, director, or owner of the applicant has been convicted of a crime, or suffered a civil judgment, involving dishonesty or the violation of state or federal securities laws;
4.3.2.3 the applicant or any of its officers, directors, or owners has defaulted in the payment of money collected for others; or
4.3.2.4 the Attorney General, or designee, finds that the financial responsibility experience, character, or general fitness of the applicant or its owners, directors, employees, or agents does not warrant belief that the business will be operated in compliance with this chapter.
4.3.3 shall deny a license as provided in 6 Del.C. §2409A(c) if no fee accompanies the application or if the Board of Directors of a not-for-profit or tax exempt applicant is not independent of the applicant's employees and agents.
4.4 An applicant must be notified in writing of a preliminary decision to deny the application within 7 days of the decision along with the reasons for the intended action. The notification must advise the applicant of the right to a hearing.
4.5 An applicant may request a hearing within twenty (20) days after receipt of the preliminary decision to deny the application.
4.5.1 If an applicant does not timely request a hearing, the preliminary decision is final.
4.5.2 A hearing will be scheduled upon timely request by the applicant as provided in Subchapter IV of the Administrative Procedures Act.
4.5.3 The Director, or an attorney designated by the Director, will serve as hearing officer after a preliminary decision to deny a license is made.
11 DE Reg. 1062 (02/01/08)
14 DE Reg. 318 (10/01/10)
5.0 Renewals
5.1 Licenses shall expire one year following the date of issuance unless it is renewed as provided in 6 Del.C. §2411A.
5.2 Licensees are responsible for annual renewal whether or not a notice of renewal is received from the Consumer Protection Unit.
5.3 Renewal applications shall be on forms approved by the Director of the Consumer Protection Unit. The following shall be included with the completed renewal application form as described in the section of the Act indicated:
5.3.1 A non refundable fee of $1000.00. 6 Del.C. 2411A §(b)(2).
5.3.2 Evidence of accreditation by an independent accrediting organization. 6 Del.C. 2411A §(b)(3).
5.3.3 Evidence of certification by applicants' counselors. 6 Del.C. 2411A §(b)(3).
5.3.4 A financial statement, audited by an accountant licensed to conduct audits, for the fiscal year immediately preceding the renewal application. 6 Del.C. §2411A(b)(3).
5.3.5 Evidence of insurance in an amount equal to the larger of $250,000 or the highest daily balance in the required trust account with terms consistent 6 Del.C. §2411A (b)(5). [See Rule 4.2.4.1 through 4.2.4.4]. The balance refers to the balance attributable to clients in Delaware whose money is deposited in the trust account.
5.3.6 A accounting of the total amount of money received by a licensee or its designee on behalf of individuals who resides in this State to pay creditors, and the amount distributed to each creditor in the 12 months immediately preceding the renewal application, if any. The distributions to creditors must be disclosed by licensees regardless of whether they receive payments or direct individuals to accumulate an account for debt settlement. 6 Del.C. §2411(a)(6).
5.3.7 If known to the licensee, the gross amount of money accumulated for settlements in the 12 months immediately preceding the renewal application pursuant to programs by or on behalf of individuals who reside in this State who are parties to agreements with the licensee. 6 Del.C. §2411A(a)(7).
5.3.8 A statement indicating the number of individuals who enrolled in debt management plans and the number of individuals who successfully completed debt management plans in the year preceding the renewal application.
5.3.9 An affidavit signed by any individual who has previously provided a criminal history check that reports any changes to his or her criminal history not included in the original record.
5.4 Applications for renewal must be filed with the Director of the Consumer Protection Unit no fewer than 30 days or more than 60 days before the expiration.
5.5 If a timely and complete application for renewal is filed, a license remains in effect until the licensee is advised of a preliminary decision to deny the application along with the reasons.
5.6 An applicant may make a request for a hearing within twenty (20) days after receipt of a preliminary decision to deny the renewal application pursuant to Subchapter IV of the Administrative Procedures Act. If no hearing is requested, the preliminary decision is final.
5.7 If a timely and complete application for renewal is not received in the Consumer Protection Unit by the expiration date of the license, the license is expired and the former licensee is prohibited from conducting business which requires a license for Debt Management Services in this State. The applicant may apply for a new license.
11 DE Reg. 1062 (02/01/08)
14 DE Reg. 318 (10/01/10)
6.0 Debt Management Services
6.1 Before entering into an agreement for debt management services, a licensee must provide an itemized list of goods and services and disclose all fees as required under 6 Del.C. §2417A.
6.1.1 The list must be clear and conspicuous.
6.1.2 The list must be provided in a record the consumer may retain regardless of whether an agreement is reached for services.
6.2 No debt management services may be furnished until a certified counselor conducts the education and financial analysis required, and prepare a suitable plan if appropriate, as provided in 2417A(a) and the consumer is
6.2.1 given a copy of the financial analysis and plan.
6.2.2 informed in a record of the availability, at the consumer's option, of assistance by toll-free communication or in person to discuss the financial analysis.
6.2.3 informed that some of the creditors, identified by the individual or known by the provider to be creditors of the individuals, may be unwilling to negotiate with the provider.
6.2.4 given the separate disclosures required under 6 Del.C. §2417A(d).
6.3 A plan or program is suitable under 6 Del.C. §2417A(b)(3)(B) when, at a minimum, the provider determines:
6.3.1 for a plan that provides for payment of principal in full, that the individual has the ability to repay the debt but only after there are concessions by creditors.
6.3.2 for a program that contemplates settling the debts of an individual for less than the principal amount owed, that the individual does not have the ability to satisfy creditors out of current income in a reasonable time even if the creditors made concessions other that reduction of principal.
6.4 Agreements must include the provisions required under 6 Del.C. §2419A.
6.4.1 Agreements must be accompanied by the "Notice of Right to Cancel" in bold-face type surrounded by bold black line as required under 6 Del.C. §2420A.
6.4.2 Any agreement that does not comply with the law or rules is voidable.
6.4.3 Agreements may be terminated as provided in 6 Del.C. §2426A.
6.4.4 In a plan that provides for regular payments to creditors, the concessions that the provider believes may be offered by each creditor must be identified in the agreement. The concessions may include reduction in finance charge or interest, reduction or waiver of charges for late payment, default or delinquency. Concessions may also include more favorable terms on a judgment.
6.4.5 An agreement may not:
6.4.5.1 provide for the application of the law of a jurisdiction other that the United States and Delaware or
6.4.5.2 limit or release the liability of any person for not performing the agreement or violating the law or
6.4.5.3 indemnify any person for liability arising under the agreement or the law.
6.5 If an individual residing in Delaware is referred by a licensee to another provider of debt management services, e.g. a referral by a credit counseling company to a debt settlement company, then it is the responsibility of the referring licensee to insure that such referral is made to a provider who is licensed or exempt from licensure in Delaware. If referrals are made though links on a licensee's web page, then the page must disclose if the referral is to a provider that is not authorized to provide services in Delaware.
6.6 If a provider uses a third party to solicit or qualify individuals for debt management services, any fee paid by the individual to the third party is an indirect charge attributed to the provider in calculating the fees or charges permitted by the provider under the Act.
6.7 Advertising must comply with the provisions is 6 Del.C. §2430A and applies to any medium, e.g. print, broadcast, telecast, electronic, internet, or other.
6.7.1 "Easily comprehensible" as used in the §2430A means that type must be large enough, and a video ad must be on the screen long enough, to be read by an individual of average eyesight. An audio ad must be spoken slowly enough to be understood by a person of average hearing.
6.7.2 A mere listing of the name, address, and phone number of a provider in a directory is not advertising under this section.
11 DE Reg. 1062 (02/01/08)
7.0 Complaints
7.1 Any person, including employees in the Consumer Protection Unit, may file a complaint against a provider in writing on a form provided by the Consumer Protection Unit.
7.2 The Director may refer a completed and signed complaint to the Special Investigation Unit for investigation.
7.2.1 If, after review and/or investigation, there is insufficient evidence to support a finding the provider is in violation of the Debt Management Services Act or the lawful rules promulgated under the Act, the Director may on his or her own accord dismiss the complaint.
7.2.2 If, after review and/or investigation, there is sufficient evidence to support a finding the provider is in violation of the Debt Management Services Act or the lawful rules promulgated under the Act, the Director may
7.2.2.1 enter a preliminary order directed to a licensee to cease and desist from any violation, to correct a violation including providing restitution, and/or to pay a civil penalty as provided in 6 Del.C. §2433A;
7.2.2.2 enter a preliminary order suspending or revoking the license of licensee as provided in 6 Del.C. §2434A;
7.2.2.3 without entering a preliminary order, assign the matter to a Deputy Attorney General for preparation and prosecution of a formal complaint before a hearing officer;
7.2.2.4 impose civil penalties and/or recover costs of enforcement; or
7.2.2.5 proceed in any other manner permitted under the Act.
7.2.3 A provider has twenty (20) days from receipt of a preliminary order in which to request a hearing before a hearing officer.
7.2.3.1 If no hearing is requested, the preliminary order becomes final.
7.2.3.2 If a hearing is requested, the matter will be assigned to a Deputy Attorney General as provided in 7.2.2.3.
7.2.4 When a hearing is requested following issuance of a preliminary order by the Director, enforcement is stayed pending a final determination by a hearing officer except in the case of an order issued with reference to 6 Del.C. §2433A(g)(2) or 2434A(c).
7.2.5 Any requested hearing will proceed as provided under the Administrative Procedures Act.
14 DE Reg. 318 (10/01/10)
8.0 Hearings
8.1 All hearings are open to the public.
8.2 An individual may represent himself or herself in a hearing. An artificial entity shall be represented by an attorney authorized to practice law in Delaware.
8.2.1 Delaware Supreme Court Rule 72 is applicable to the admission of attorneys, who are not licensed in Delaware, pro hac vice before administrative agencies.
8.3 Testimony shall be under oath or affirmation.
8.4 The hearing officer shall preserve the record of the hearing including the pleadings and documentary evidence.
8.5 The hearing shall be recorded verbatim by a court reporter. The expense of preparing any transcript for any purpose, including an appeal, shall be borne by the person requesting it.
8.6 The Delaware Uniform Rules of Evidence will provide a reference for the hearing officer. However, the hearing officer may admit any evidence that reasonable and prudent individuals would commonly accept in the conduct of their affairs and give probative effect that evidence. Evidence may not be excluded solely on the ground that it is hearsay, but a decision may not be based solely on hearsay.
9.0 Summary suspension.
9.1 The Director of Consumer Protection, by designation of the Attorney General, may order a summary suspension of a license effective the date specified in the order as provided in 6 Del.C. §2434A (c).
10.0 Appeals
10.1 Judicial review of regulations is authorized under 29 Del.C. §10141.
10.2 Judicial review of case decisions is authorized under 29 Del.C. §10142.
10.3 There is no automatic stay of enforcement of a decision when an appeal is filed from the final order of the Director or hearing officer. The requirements for a stay of enforcement are provided in 29 Del.C. §10144.
11.0 Trust Account
11.1 All money provided to a licensee pursuant to a plan for distribution to creditors shall be deposited in a trust account within two (2) business days after receipt and distributed to creditors within eight (8) days.
11.2 The licensee shall maintain separate records for each individual.
11.3 Each trust account shall be reconciled at least once each month. The balance must at all time equal the sum of the balances of each individual's account.
11.4 If the agreement is terminated or the plan fails, the licensee shall return the funds remaining in the trust account, less fees permitted under the Act, to the individual client.
11.5 A licensee shall notify the Director of the Consumer Protection Unit of the Attorney General's Office before a trust account is moved and shall provide the name, address, and telephone number of the new bank along with the new account number.
11.6 A provider may not co-mingle funds of others with those being held in trust for participants of debt management plans. Interest payable on the account must be credited to the individual depositors and not to the provider except that such interest may be used to pay the fees of the financial institution related to the trust account.
11.7 A licensee shall comply with all provisions related to the trust account required by 6 Del.C. §2422A.
11 DE Reg. 1062 (02/01/08)
12.0 Examinations
12.1 An on-site examination of assets, securities, books, accounts, papers, and records of a licensee or affiliate can be conducted by an examiner designated by the Director with or without notice during regular business hours. The records shall document the information in 6 Del.C. §2427A including at least the following:
12.1.1 A file for each consumer containing the preliminary financial analysis prepared for the consumer, the original agreement, the consumer's total income along with the debt balance, the monthly payment due each creditor, and copies of the periodic statements provided to the consumer.
12.1.2 An activity record for each consumer including the account number, name, address, date of the agreement, total indebtedness, monthly receipts including the date of receipt, any fees charged, amounts disbursed to creditors including the payment date, and the estimated term of the agreement. The record shall also include any action taken to recover unpaid fees that may be owed by a consumer who has cancelled an agreement.
12.1.3 In the case of a settlement with a creditor for less that the principal amount due, the record shall include the terms of the settlement, the amount owed at the time of an agreement, the amount of the settlement, and the calculation of a settlement fee.
12.1.4 An alphabetical index of names, addresses, account numbers, date of agreement, and total indebtedness.
12.2 Any person who is connected or associated with the licensee may be examined, under oath, as to the facts and circumstances of any matter under examination.
12.3 A licensee shall pay all reasonably incurred fees, costs, and expenses directly related to an examination including travel expenses, lodging expenses, and a per diem for examiners. Payment shall be made within 10 days after receipt of a statement from the Director.
12.4 The Director may accept the report of a responsible supervisory agency from another state in lieu of an on-site examination.
13.0 Miscellaneous
13.1 Computation of time. In computing any period of time prescribed in or allowed by these Rules, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday or State legal holiday, in which event the period runs until the end of the next day that is not a Saturday, Sunday or State legal holiday. If service is made by mail, three days shall be added to the prescribed period for response.
13.2 A list of licensees is available upon request to the Consumer Protection Unit or online at the address in Rule 3.0.
13.3 A licensee shall notify the Director of the Consumer Protection Unit within 30 days of receipt of a notice of civil litigation filed by or on behalf of an individual who was residing in Delaware at the time an agreement for services was signed or at the time the notice was served.
13.4 A licensee shall notify the Director of the Consumer Protection Unit within 10 days after a change of information specified in 6 Del.C. §§2405A or 2406A.
10 DE Reg. 1309 (02/01/07)
103 Consumer Protection Unit Administrative Enforcement Proceedings
6 Del. Admin. Code § 103 Consumer Protection Unit Administrative Enforcement Proceedings
103 Consumer Protection Unit Administrative Enforcement Proceedings
1.0 Construction of rules of practice and procedure.
1.1 Unless otherwise provided, these Rules of Practice govern Consumer Protection Unit (“CPU”) administrative proceedings brought under 29 Del.C. §2523.
1.2 For purposes of these rules: (1) any term in the singular includes the plural, and any term in the plural includes the singular, if such use would be appropriate; and (2) any use of a masculine, feminine, or neuter gender encompasses such other genders as would be appropriate.
2.0 Appearance and practice in administrative proceedings.
2.1 Representing oneself. In any proceeding, an individual may appear on his or her own behalf.
2.2 Attorneys. In any proceeding, a person may be represented by an attorney at law admitted to practice before the Supreme Court of the State of Delaware. Attorneys who are not so admitted must apply for admission pro hac vice through Rule 2.3 below.
2.3 Appearance pro hac vice. Pursuant to Rule 72(a) of the Delaware Supreme Court Rules, attorneys who are not members of the Delaware Bar may be admitted pro hac vice in a proceeding in the discretion of the administrative hearing officer upon written motion by a member of the Delaware Bar who maintains an office in this State for the practice of law ("Delaware Counsel"). Pursuant to Delaware Supreme Court Rule 72(c), Delaware Counsel for any party shall appear in the matter for which admission pro hac vice is filed and shall sign or receive service of all notices, orders, pleadings or other papers filed in the matter and shall attend all proceedings before the hearing officer, unless excused by the hearing officer.
2.4 Designation of address for service; notice of appearance; withdrawal.
2.4.1 Representing oneself. When an individual first makes any filing or otherwise appears on his or her own behalf before a hearing officer in a proceeding, he or she shall file with the hearing officer or otherwise state on the record, and keep current, an address at which any notice or other written communication required to be served upon him or her or furnished to him or her may be sent and a telephone number where he or she may be reached during business hours.
2.4.2 Attorneys. When an attorney first makes any filing or otherwise appears in a representative capacity before a hearing officer in a proceeding, he or she shall file with the hearing officer, and keep current, a written notice of appearance stating the name of the proceeding; the attorney's name, bar identification number, business address, telephone number, and electronic mail address; and the name and address of the person or persons represented.
2.4.3 Withdrawal. Withdrawal by any attorney shall be permitted only by written order of the hearing officer. A motion seeking leave to withdraw shall state with specificity the reason for such withdrawal.
3.0 Appointment of a hearing officer.
3.1 The Attorney General shall designate a Deputy Attorney General or a Special Deputy Attorney General (as set forth in subsection 3.3 below) outside the Fraud and Consumer Protection Division to act as the hearing officer in a particular CPU administrative case or indefinitely until the authority is transferred.
3.2 This authority of the Attorney General to name a hearing officer may be delegated to any Deputy Attorney General outside the Fraud and Consumer Protection Division.
3.3 The Attorney General may appoint any member of the Delaware Bar as a Special Deputy Attorney General to act as an administrative hearing officer in any case brought by the CPU.
15 DE Reg. 531 (10/01/11)
4.0 Disqualification and recusal of administrative hearing officer.
4.1 Notice of disqualification. If at any time a hearing officer believes himself or herself to be disqualified from considering a matter, the hearing officer shall issue a notice stating that he or she is withdrawing from the matter and setting forth the reasons therefor.
4.2 Motion for withdrawal. Any party who has a reasonable, good faith basis to believe that a hearing officer has a personal bias, or is otherwise disqualified from hearing a case, may make a motion to the hearing officer that the hearing officer withdraw. The motion shall be accompanied by an affidavit setting forth in detail the facts alleged to constitute grounds for disqualification. If the hearing officer finds himself or herself not biased or otherwise disqualified, he or she shall so rule and shall continue to preside over the proceeding.
5.0 Ex parte communications.
5.1 No party to a proceeding, or counsel to or representative of a party to a proceeding, shall make or knowingly cause to be made an ex parte communication relevant to the merits of that proceeding to the administrative hearing officer.
5.2 No administrative hearing officer with respect to a proceeding shall make or knowingly cause to be made to a party to that proceeding, or counsel to a party to that proceeding, an ex parte communication relevant to the merits of that proceeding.
6.0 Motions.
6.1 Generally. Unless made during a hearing or conference, a motion shall be in writing, shall state with particularity the grounds therefor, shall set forth the relief or order sought, and shall be accompanied by a written brief of the points and authorities relied upon. All written motions shall be served in accordance with Rule 7.0, be filed in accordance with Rule 8.0, meet the requirements of Rule 9.0, and be signed in accordance with Rule 10.0. The hearing officer may order that an oral motion be submitted in writing. No oral argument shall be heard on any motion unless the hearing officer otherwise directs.
6.2 Opposing and reply briefs. Briefs in opposition to a motion shall be served and filed within 10 days after service of the motion. Reply briefs shall be served and filed within three days after service of the opposition.
6.3 Length limitation. A brief in support of or opposition to a motion shall not exceed 10 pages, exclusive of pages containing any table of contents, table of authorities, and/or addendum. Requests for leave to file briefs in excess of 10 pages are disfavored.
7.0 Service of papers by parties.
7.1 Service initiating a proceeding. At the outset of an administrative proceeding, the complaint and a notice of the filing of the action shall be served on each respondent by:
7.1.1 personal hand delivery;
7.1.2 certified mail, return receipt requested, and by United States first class mail at the respondent’s last known address;or
7.1.3 any form of service of process effective under Delaware Superior Court Civil Rule 4(f); or (d) service under Rule 7.2 below.
7.2 "Long-arm" service of process to initiate a proceeding. Any service of process that would be effective to create personal jurisdiction in the Superior Court under 10 Del.C. §3104 shall be effective to create personal jurisdiction in the Department of Justice administrative forum under these Rules.
7.3 Service of all other filings.
7.3.1 When required. In every administrative proceeding, each paper, including each notice of appearance, written motion, brief, or other written communication, shall be served upon each party in the proceeding in accordance with the provisions of this section.
7.3.2 Upon a person represented by counsel. Whenever service is required to be made upon a person represented by counsel who has filed a notice of appearance pursuant to Rule 2.0, service shall be made pursuant to paragraph 7.3.3 of this section upon counsel, unless service upon the person represented is ordered by the hearing officer.
7.3.3 How made. Service shall be made by delivering a copy of the filing. “Delivering” means:
7.3.3.1 Personal service by handing a copy to the person required to be served; or leaving a copy at the person's office with a clerk or other person in charge thereof, or, if there is no one in charge, leaving it in a conspicuous place therein; or, if the office is closed, or the person to be served has no office, leaving it at the person's dwelling house or usual place of abode with some person of suitable age and discretion then residing therein;
7.3.3.2 Mailing the papers through the U.S. Postal Service by first class, registered, or certified mail or Express Mail delivery addressed to the person;
7.3.3.3 Sending the papers through a commercial courier service or express delivery service; or
7.3.3.4 Transmitting the papers by facsimile machine or electronic mail transmission where the following conditions are met:
7.3.3.4.1 The persons serving each other by facsimile transmission or electronic mail transmission have agreed to do so in a writing, and
7.3.3.4.2 Receipt of each document served is confirmed electronically or by a manually signed receipt.
7.3.4 When service is complete. Personal service, service by U.S. Postal Express Mail or service by commercial courier or express delivery service is complete upon delivery. Service by mail is complete upon mailing. Service by facsimile or electronic mail transmission is complete upon confirmation of transmission.
15 DE Reg. 531 (10/01/11)
8.0 Filing of papers with the hearing officer: procedures.
8.1 When to file. All papers required to be served by a party upon any person shall be filed with the hearing officer at the time of service. Papers required to be filed with the hearing officer must be received within the time limit, if any, for such filings.
8.2 Where to file. Filing of papers shall be made by filing the original papers with the hearing officer.
8.3 To whom to direct the filing. All motions, objections, applications or other filings made during a proceeding shall be directed to and decided by the hearing officer.
8.4 Certificate of service. Papers filed with the hearing officer shall be accompanied by a certificate stating the name of the person or persons served, the date of service, the method of service and the mailing address, facsimile telephone number, or electronic mail address to which service was made, if not made in person.
9.0 Filing of papers: form.
9.1 Specifications. Papers filed in connection with any administrative proceeding shall:
9.1.1 Be on one grade of unglazed white paper measuring 8-1/2 x 11 inches, except that, to the extent that the reduction of larger documents would render them illegible, such documents may be filed on larger paper;
9.1.2 Be typewritten or printed in either ten or twelve-point typeface or otherwise reproduced by a process that produces permanent and plainly legible copies;
9.1.3 Include at the head of the paper, or on a title page, the title of the proceeding, the names of the parties, the subject of the particular paper or pleading, and the file number assigned to the proceeding;
9.1.4 Be paginated with all margins at least one inch wide;
9.1.5 Be double-spaced, with single-spaced footnotes and single-spaced indented quotations; and
9.1.6 Be stapled, clipped or otherwise fastened in the upper left corner.
9.2 Signature required. All papers must be dated and signed as provided in Rule 10.0.
9.3 Suitability for record keeping. Documents which, in the opinion of the hearing officer, are not suitable for computer scanning or microfilming may be rejected.
10.0 Filing of papers: signature requirement and effect.
10.1 General requirements. Every filing of a party represented by counsel shall be signed by Delaware Counsel of record in his or her name and shall state that counsel's bar identification number, business address, electronic mail address, and telephone number. A party who acts as his or her own counsel shall sign his or her individual name and state his or her address and telephone number on every filing.
10.2 Effect of signature.
10.2.1 The signature of counsel or a party shall constitute a certification that:
10.2.1.1 the person signing the filing has read the filing;
10.2.1.2 to the best of his or her knowledge, information and belief, formed after reasonable inquiry, the filing is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and
10.2.1.3 the filing is not made for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of adjudication.
10.2.2 If a filing is not signed, the hearing officer shall strike the filing, unless it is signed promptly after the omission is called to the attention of the person making the filing.
11.0 Computation of time.
11.1 Computation. In computing any period of time prescribed in or allowed by these Rules of Practice or by order of the hearing officer, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday or State legal holiday in which event the period runs until the end of the next day that is not a Saturday, Sunday or State legal holiday. Unless otherwise specified, intermediate Saturdays, Sundays and State legal holidays shall be excluded from the computation when the period of time prescribed or allowed is 10 days or less, not including any additional time allowed for service by mail in paragraph 11.2 of this section. If on the day a filing is to be made, weather or other conditions have caused the designated filing location to close, the filing deadline shall be extended to the end of the next day that is neither a Saturday, Sunday nor State legal holiday.
11.2 Additional time for service by mail. If service is made by mail, three days shall be added to the prescribed period for response.
12.0 Complaints: general and summary proceedings.
12.1 General. If the Director of the CPU or a Deputy Attorney General acting under his or her authority believes that any person is violating or has violated any provision of the statutes the CPU is charged to enforce, or any rule or regulation thereunder, the CPU may issue a complaint as provided herein. The service and filing of the complaint constitutes the commencement of the administrative proceeding.
12.2 Summary proceedings. See Rule 25.1.3 for procedure in summary proceedings.
15 DE Reg. 531 (10/01/11)
13.0 Complaints: form and content.
13.1 Each complaint shall be in writing and signed by a Deputy Attorney General. The complaint shall specify in reasonable detail the conduct alleged to constitute the violation and the statutory provision, rule or regulation the respondent is alleged to be violating or to have violated.
13.2 If the complaint consists of several claims, each claim shall be stated separately.
14.0 Complaints: amendment and withdrawal.
14.1 At any time prior to the filing of a responsive pleading or the commencement of a hearing (whichever is earlier), the Deputy Attorney General who initiated the proceeding may amend the complaint. After the filing of a responsive pleading or the commencement of a hearing, upon motion by the Deputy Attorney General who initiated the proceeding, the hearing officer may permit amendment of a complaint.
14.2 At any time prior to the filing of a responsive pleading or the commencement of a hearing (whichever is earlier), the Deputy Attorney General who initiated the proceeding may withdraw the complaint. Such withdrawal shall be without prejudice to refiling, and the Deputy Attorney General who initiated the proceeding shall be permitted to file a complaint based on allegations concerning the same facts and circumstances that are set forth in the withdrawn complaint. The Deputy Attorney General who initiated the proceeding may withdraw the complaint after the filing of a responsive pleading or commencement of a hearing, and in the absence of a motion the withdrawal shall be without prejudice; however, upon motion of the respondent, the hearing officer, after considering the facts and circumstances of the withdrawal, shall determine whether the withdrawal shall be with prejudice.
15.0 Answers to complaints.
15.1 Form, service, notice. Pursuant to Rule 7.2, each respondent named in a complaint shall serve an answer to the complaint on the Deputy Attorney General who initiated the proceeding, all other parties, and the hearing officer within 20 days after service of the complaint on such respondent. The hearing officer may extend such period for good cause.
15.2 Content, affirmative defenses. Unless otherwise ordered by the hearing officer, an answer shall specifically admit, deny, or state that the respondent does not have and is unable to obtain sufficient information to admit or deny each allegation in the complaint. When a respondent intends to deny only part of an allegation, the respondent shall specify so much of it as is admitted and deny only the remainder. A statement of lack of information shall be deemed a denial. Any allegation not denied shall be deemed admitted. Any affirmative defense shall be asserted in the answer.
15.3 Amendments to answer. Upon a motion by a respondent, the hearing officer may permit an answer to be amended.
15.4 Extension of time to answer amended complaint. If a complaint is amended pursuant to Rule 14.0, the time for filing an answer or amended answer shall be extended to 20 days after service of the amended complaint.
15.5 Failure to answer. If a respondent does not file an answer to the complaint within the time required, a second notice and copy of the complaint shall be sent to such respondent at his or her last known address requiring an answer within 10 days after service of the second notice.
15.6 Default orders. If the respondent fails to answer the second notice and complaint, after failing to answer the first, the Deputy Attorney General prosecuting the matter may move that the hearing officer issue an order finding the respondent in default and granting any lawful relief requested in the complaint or the motion. This subsection does not apply to summary orders.
15 DE Reg. 531 (10/01/11)
16.0 Scheduling a hearing.
16.1 Hearing officer order requiring hearing. Upon the filing of a complaint, the hearing officer should promptly schedule a hearing to be held between 40 and 60 days after the date the complaint was filed. See Rule 25.1.3 for hearing procedures in summary proceedings.
16.2 Notice of hearing. Upon scheduling a hearing, the hearing officer shall issue a notice stating the date, time and place of the hearing, and shall serve such notice on the parties.
17.0 Pre-hearing conferences.
Procedure. On his or her own motion or at the request of a party, the hearing officer may, in his or her discretion, direct counsel or any party to meet for an initial, final or other prehearing conference. Such conferences also may be held with one or more persons participating by telephone or other remote means.
15 DE Reg. 531 (10/01/11)
18.0 Pre-hearing submissions.
18.1 Submissions generally. In connection with the pre-hearing conference, the hearing officer, on his or her own motion or at the request of a party, may order any party to furnish such information as deemed appropriate.
18.1.1 An outline or narrative summary of the party’s case or defense;
18.2 Timing of production. The hearing officer may modify the time limits for production of evidence set by these rules.
15 DE Reg. 531 (10/01/11)
19.0 Administrative hearings.
19.1 Hearings. Hearings for the purpose of taking evidence shall be held upon order of the hearing officer. Except for summary proceedings, hearings should generally be scheduled not less than 40 days nor more than 60 days after the issuance of a complaint.
19.1.1 All hearings shall be conducted in a fair, impartial, expeditious and orderly manner.
19.1.2 All hearings, except ex parte applications for a summary order, shall open to the public.
19.2 Continuance. Any motion for a continuance of the hearing date shall be filed as far in advance of the hearing date as practicable. Motions must be for good cause and state with specificity the reason for the continuance request. Any motion for a continuance filed within 10 days of a scheduled hearing is disfavored and will be denied in the absence of extraordinary circumstances.
19.3 Exchange of evidence and witness list. Unless otherwise ordered by the hearing officer, no later than 20 calendar days prior to the date of the hearing the CPU shall submit to each respondent and to the hearing officer copies of all documentary evidence and the names of the witnesses the CPU intends to present in its case-in-chief at the hearing. Unless otherwise ordered, no later than 10 calendar days prior to the date of the hearing each respondent shall submit to the CPU and to the hearing officer all documentary evidence and the names of the witnesses the respondent intends to present at the hearing. If a party intends to use the testimony of an expert witness, that party shall include as part of its documentary production a curriculum vitae or statement of the expert's qualifications and a written summary of the expert’s opinions on the topic of the intended testimony.
19.4 Hearing procedure. In the hearing, each party is entitled to present its case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as, in the discretion of the hearing officer, may be required for a full and true disclosure of the facts.
19.5 Testimony. Witnesses shall testify under oath or affirmation. The oath or affirmation may be administered by a Deputy Attorney General, court reporter, notary public or any other officer authorized to administer oaths and affirmations under Delaware law.
20.0 Evidence.
20.1 Admissibility. The hearing officer shall receive relevant evidence and may exclude all evidence that is irrelevant, immaterial or unduly repetitious.
20.1.1 The hearing officer may make reference to and be guided by the Delaware Uniform Rules of Evidence. Notwithstanding those rules, the hearing officer may admit any evidence that reasonable and prudent individuals would commonly accept in the conduct of their affairs, and give probative effect to that evidence.
20.1.2 Evidence may not be excluded solely on the ground that it is hearsay.
20.2 Objections. Objections to the admission or exclusion of evidence must be made on the record and shall be in short form, stating the grounds relied upon. Exceptions to any ruling thereon by the hearing officer need not be noted at the time of the ruling.
20.3 Offers of proof. Whenever evidence is excluded from the record, the party offering such evidence may make an offer of proof, which shall be included in the record.
21.0 Proposed findings of fact, conclusions of law, and post-hearing briefs.
21.1 At the discretion of the hearing officer, the parties may be ordered to file proposed findings of fact and conclusions of law, or post-hearing briefs, or both. The hearing officer may order that such proposed findings and conclusions be filed together with, or as part of, post-hearing briefs.
21.2 Proposed findings of fact or other statements of fact in briefs shall be supported by specific references to the record.
21.3 In any case in which the hearing officer has ordered the filing of proposed findings of fact and conclusions of law, or post-hearing briefs, the hearing officer shall, after consultation with the parties, prescribe the period within which proposed findings of fact and conclusions of law and/or post-hearing briefs are to be filed. Such period shall be reasonable under all the circumstances but the total period allowed for the filing of post-hearing submissions shall not exceed 30 days after the conclusion of the hearing unless the hearing officer permits a different period and sets forth in an order the reasons why a longer period is necessary.
21.4 Unless the hearing officer orders otherwise, no post-hearing submission shall exceed 25 pages, exclusive of cover sheets, tables of contents and tables of authorities.
22.0 Final decision after a hearing.
22.1 In any administrative proceeding in which a hearing is held, the hearing officer shall issue a final written decision. Such decisions should generally be issued within 60 days after the last day of the hearing or the filing of any post-hearing submission, whichever is later. The decision shall include:
22.1.1 A brief summary of the evidence;
22.1.2 Findings of fact based on the evidence;
22.1.3 Conclusions of law; and
22.1.4 A statement of any sanctions, where applicable.
22.2 The hearing officer may order any remedy authorized by 29 Del.C. §2524.
23.0 Failure to appear at hearing.
23.1 A party’s failure to appear at a hearing that has been duly noticed shall not be cause to continue the hearing. If the hearing officer so orders, the hearing shall proceed in the party’s absence, which shall be noted in the record.
23.2 The hearing officer, in his or her discretion, may choose to treat a respondent's failure to appear at the hearing as a default and issue an order pursuant to Rule 15.6.
15 DE Reg. 531 (10/01/11)
24.0 Disruptive conduct.
If a party, counsel to a party or witness engages in conduct in violation of an order of the hearing officer, or other disruptive conduct during an administrative proceeding, the hearing officer may impose non-monetary sanctions therefor, including the issuance of an order: (i) excluding the party and/or his or her counsel from any further participation in the proceeding; (ii) striking pleadings or evidence from the record; (iii) providing that certain facts shall be taken to be established for purposes of the proceeding; or (iv) providing for such other relief as is just and equitable under the circumstances.
25.0 Cease and desist orders; summary proceedings.
25.1 Cease and desist orders may be issued by agreement, administrative order, or summary administrative order.
25.1.1 By agreement. Where it appears to the Director that a person has engaged in, is engaging in, or is about to engage in a practice declared unlawful by any provision of the statutes the CPU is charged to enforce, or any rule or regulation thereunder, the Director may enter into a written agreement with that person and issue a cease and desist order ordering the immediate discontinuance of that practice. Consistent with the agreement, the order may also order any relief or remedy authorized under any statute enforced by the CPU. A cease and desist order by agreement may be issued in the absence of a complaint initiating an administrative or civil action, or it may be issued in connection with the settlement of an administrative or civil action.
25.1.2 By administrative order. Upon the finding of a violation of any provision of the statutes the CPU is charged to enforce, or any rule or regulation thereunder, the administrative hearing officer may issue a cease and desist order. The prohibited conduct in the order should be reasonably related to the conduct constituting the violation.
25.1.3 By summary administrative order. Where the Director, in his or her discretion, perceives an immediate threat to the public interest as a result of a violation of any provision of the statutes the CPU is charged to enforce, or any rule or regulation thereunder, the Director may issue a summary cease and desist order ordering an immediate discontinuance of the unlawful practice identified in the order.
25.1.3.1 Before issuing the summary order, the Director or his or her designee shall attempt to obtain voluntary compliance from the alleged violator by telephone call or letter. A failure to comply with any aspect of the request for voluntary compliance shall be deemed non-compliance with the request. Any person who is the subject of a summary order shall promptly be given notice of that order and of the reasons therefor.
25.1.3.2 A complaint detailing the specific allegations against the alleged violator shall accompany any summary cease and desist order served upon the alleged violator. The complaint and summary cease and desist order shall be served upon the alleged violator by first class and certified mail to the alleged violator’s last known address. Service shall be deemed effective upon mailing.
25.1.3.3 A hearing shall be scheduled by the Director or his or her designee at the time of the issuance of the complaint and summary cease and desist order. The CPU shall provide a hearing on the charges in the complaint within 10 days after the issuance of the complaint and the cease and desist order.
25.1.3.4 A written opinion and order, containing findings of fact and conclusions of law, shall issue within 10 days after the close of the hearing.
25.1.3.5 If no hearing has been provided within 10 days after the issuance of the summary cease and desist order, the order shall expire at the end of the tenth day after it was issued unless the alleged violator waives his or her right to a prompt hearing. If there is a hearing but no decision is issued within 10 days after the close of the hearing, the summary cease and desist order shall expire at the end of the tenth day after the close of the hearing. An order that has expired in accordance with the restrictions of this subparagraph may not be reissued as a summary order.
25.1.3.6 The order issued after the hearing may provide for any administrative remedy contained in 29 Del.C. §2524.
25.1.3.7 Any person who willfully violates a cease and desist order may be sanctioned as provided in 29 Del.C. §2524(b) or §2526.
26.0 Appeals.
26.1 In any administrative proceeding, any person aggrieved by a final order of the hearing officer may file an appeal to the Superior Court no later than 30 days after the date of the order, as provided in 29 Del.C. §2523(d). A copy of the notice of appeal shall be promptly filed with the hearing officer in the administrative proceeding.
26.2 Upon the filing of an appeal to the Superior Court, the administrative record shall be filed with the Court in accordance with Superior Court Civil Rule 72.
26.3 Any party that files an appeal to the Superior Court shall be responsible for filing with the Court in a timely manner the transcript of that portion of the administrative proceedings in which error allegedly occurred. Each party on appeal shall bear his, her or its own costs of transcription.
14 DE Reg. 577 (12/01/10)
15 DE Reg. 531 (10/11/11)
104 Privacy Policies For Commercial Online Sites, Services, and Applications (Repealed)
6 Del. Admin. Code § 104 Privacy Policies For Commercial Online Sites, Services, and Applications (Repealed)
This regulation was repealed, effective December 11, 2024.
History
- 20 DE Reg. 55 (07/01/16)
- 28 DE Reg. 458 (12/01/24)
105 Health Spa Act Regulation
6 Del. Admin. Code § 105 Health Spa Act Regulation
6 Del.C. §§4201 - 4222
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-1.0 Applicability
1.1 The Director of the Consumer Protection Unit enforces the Health Spa Regulation Act pursuant to the authority granted to the Director through 6 Del.C. §4222.
1.2 This Regulation of the Health Spa Regulation Act articulates the Director's interpretation of the Act for purposes of implementing and clarifying the statute pursuant to the authority granted in 29 Del.C. §2521.
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-2.0 Definitions
The following terms are defined in 6 Del.C. §4202 and have the same meaning when used in these rules:
"Buyer"
"Director"
"Health spa"
"Health Spa Contract"
"Health spa services"
"Initiation fee"
"Pre-opening contract"
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-3.0 Registration
3.1 All Health Spas must register with the Director prior to offering, advertising, selling, or executing any Health Spa Contract in the State of Delaware regardless of the contract term.
3.1.1 The individual act of offering or advertising any Health Spa Contract is still unlawful unless the Health Spa has been properly registered with the Director.
3.1.2 Multiple-class, class-package style memberships where consumers purchase a set of classes that is comparable in duration and fees to a three-month membership are considered Health Spa Contracts.
3.1.3 If a Health Spa believes they are exempt from payment due to their multiple-class package model, it should inquire with the Director by presenting contracts, plan offerings, and expected duration of packages at HealthSpaRegulation@Delaware.gov.
3.2 Health Spas include yoga studios, Pilates studios, and other studios that use a room in which activities done in service of advertised physical exercise, physical fitness, weight control, or figure reduction occurs.
3.3 A Health Spa is required to sign the application to register under penalty of perjury.
3.4 Upon the occurrence of any material change in the information on the application to register, the Health Spa has 20 days to update the Director of the related change in information.
3.5 All Health Spas must be properly registered by January 1 of every calendar year. A calendar year runs from January 1 to December 31.
3.5.1 Applications to register must be emailed to the Director at HealthSpaRegulation@Delaware.gov by December 1 prior to the year the Health Spa is registering for.
3.5.2 Applications submitted after December 1 may be subject to fines at the Director's discretion.
3.6 Health Spas must re-submit a registration annually. Registration does not automatically renew.
3.7 Registration is not transferrable.
3.7.1 Registration is specific to a health spa's location.
3.7.2 If a health spa closes a location and re-establishes the same business in a different location, a new registration must be submitted unless:
3.7.2.1 The new location is within a 15-mile driving distance; and
3.7.2.2 Interchangeable, comparable services are offered to members with no increase to charges, dues, or fees.
3.7.3 If a health spa has multiple locations, each location must submit a separate registration unless the following conditions are present:
3.7.3.1 Each location is within a 15-mile driving distance; and
3.7.3.2 Interchangeable, comparable services are offered to members with no increase in charges, dues, or fees.
3.8 Pre-registration Contracts and Advertising
3.8.1 To lawfully offer, advertise, and sell pre-opening contracts or Health Spa Contracts prior to opening, a Health Spa must file a bond or letter of credit with the Director at the time of registration.
3.8.2 Any Health Spa that has registered with the Director to lawfully advertise or sell pre-opening contracts may request the bond or letter of credit be terminated after 90 days of operation but is not required to cancel or terminate the bond or letter of credit.
3.8.3 Failure to terminate the bond as provided in subsection 3.8.2 of this regulation is not a waiver of the annual registration requirement for health spas offering and selling qualifying health spa contracts.
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-4.0 Health Spa Guaranty Fund
4.1 Health Spas that offer, advertise, or execute or cause to be executed by the buyer a Health Spa Contract must pay an annual fee pursuant to 6 Del.C. §4203:
4.2 Health spas must pay an annual fee when:
4.2.1 A Health Spa Contract is offered, advertised, executed, or caused to be executed by a buyer.
4.2.2 A health spa:
4.2.2.1 Obligates a buyer to purchase health spa services to be rendered over a period longer than three months; and
4.2.2.2 Receives money, in an aggregate amount at any point, the amount of which is greater than the value of three months' commitment, are required to pay the annual fee.
4.3 Waiver of Annual Fee
4.3.1 A waiver of the annual fee does not waive other registration requirements.
4.3.2 A health spa that meets the criteria for a waiver may apply for a fee waiver under subsection 4.3 of this regulation when filing the annual registration at HealthSpaRegulation@Delaware.gov.
4.3.3 A waiver of the annual fee may be granted at the discretion of the Director when:
4.3.3.1 A health spa does not meet all the criteria of subsection 4.2.2.
4.3.3.2 A health spa that advertises or offers but does not execute contracts for longer than three months.
4.3.3.2.1 If at any point during a calendar year, a health spa that has been granted an exemption pursuant to subsection 4.3.3.2 of the regulation executes a qualifying health spa contract:
4.3.3.2.1.1 The fee waiver shall be automatically revoked without any action by the Director; and
4.3.3.2.1.2 The Health Spa will be required to pay the appropriate fee pursuant to subsection 4.1 of this regulation.
4.3.3.3 The Health Spa Guaranty Fund is over $250,000 and a health spa is able to demonstrate proof of payment into the fund for any three years in a row.
4.3.3.3.1 Health spas bear the burden of proving they have paid the annual fee for three consecutive years with proof of payment.
4.3.3.3.2 Proof of payment means a copy of the check, bank invoice, or statement demonstrating payment was withdrawn, or other proof of transaction.
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-5.0 Right of Cancellation
5.1 Every Health Spa Contract must be memorialized in writing between the Health Spa and the consumer regardless of the duration of the contract, regardless of fees and pricing schedules, and regardless of the number of locations.
5.2 Moving or Going Out of Business
5.2.1 If a Health Spa moves or goes out of business, the Spa must provide its consumers with an alternative facility within 15 miles driving distance, not radial distance, of the original Health Spa location.
5.2.2 If the location is within a 15-mile radius but not within a 15-mile driving distance, the Health Spa must offer its members a pro-rated refund of their fees/paid dues.
History
- 25 DE Reg. 539 (11/01/21)
6 Del. Admin. Code § 105-6.0 Initiation Fees Limited
6.1 It is unlawful for a Health Spa to charge an initiation fee for any contract of less than 12 months' duration. Any Health Spas found to be doing so are subject to be fined at the Director's discretion.
6.2 An initiation fee is distinct from optional fees offered in exchange for merchandise that are neither required nor necessary to fully utilize all services offered in the health spa contract.
6.3 Initiation fees include one-time facility fees, club entrance fees, and one-time fees marketed as refundable pending successful completion of the contract.
History
- 25 DE Reg. 539 (11/01/21)
106 Home Improvement Services
6 Del. Admin. Code § 106-1.0 Authority
1.1 Authority. The Director of the Division of Consumer Protection enforces the Consumer Fraud Act pursuant to the authority granted to that Director through 29 Del.C. §2520, and has the authority to promulgate rules and regulations to implement or clarify the statutes that the Division of Consumer Protection is charged to enforce or otherwise to carry out the purposes of those statutes pursuant to 29 Del.C. §§2520(6) and 2521. The Division of Consumer Protection has designated the Director of the Consumer Protection Unit to promulgate this regulation.
1.2 Scope. This regulation of the Consumer Fraud Act covers certain unlawful practices covering home improvement transactions but shall not cover new construction of single-family dwellings or rebuilding all or substantially all of an existing or preexisting single-family dwelling.
1.3 Construction. This regulation shall be liberally construed to effectuate the purposes of the Consumer Fraud Act, 6 Del.C. §2511, et seq.
1.4 Severability. If, for any reason, any section, subsection, sentence, clause, phrase, or provision of this regulation or the application thereof to any person or circumstance is held unconstitutional or invalid, such unconstitutionality or invalidity shall not affect other sections, subsections, sentences, clauses, phrases, or provisions of its application to any other person or circumstance, and to this end each and every section, subsection, sentence, clause, phrase, or provision of this regulation is hereby declared severable.
History
- 27 DE Reg. 254 (10/01/23)
6 Del. Admin. Code § 106-2.0 Definitions
The following words and terms, when used in this regulation, have the following meaning:
"Buyer" means the buyer of home improvement merchandise from a home improvement contractor.
"Clearly and conspicuously" has the meaning set forth in 6 Del.C. §2731.
"Consumer Protection Unit" means the Consumer Protection Unit of the Department of Justice
"Home improvement" means any alteration, repair, addition, modification or improvement to any dwelling or the property on which it is situated, including but not limited to the construction, painting or coating, installation, replacement or repair of driveways, sidewalks, swimming pools, unattached structures, porches, kitchens, bathrooms, chimneys, fireplaces, stoves, air conditioning or heating systems, hot water heaters, water treatment systems, electrical wiring or systems, plumbing fixtures or systems, doors or windows, roofs, gutters, downspouts and siding.
"Home improvement contract" means a written agreement, including all amendments, modifications, and addenda thereto, between a home improvement contractor and a buyer and includes all agreements under which the home improvement contractor is to perform labor or render services for home improvements, or furnish materials in connection therewith.
"Home improvement contractor" means all persons, firms, partnerships, joint ventures, limited liability companies, and companies, their officers, representatives, agents, and employees, engaged in the trade or commerce of home improvement.
"Merchandise" has the meaning set forth in 6 Del.C. §2511.
"Person" has the meaning set forth in 6 Del.C. §2511.
History
- 27 DE Reg. 254 (10/01/23)
6 Del. Admin. Code § 106-3.0 Home Improvement Transactions
3.1 In connection with any home improvement transaction, it is an unlawful practice, as set forth in 6 Del.C. §2513(a) for any person to:
3.1.1 Fail to provide the buyer with a home improvement contract that describes, in a meaningful way, the merchandise purchased, the contract price together with all financing information or credit terms required by applicable law, any other terms required by this regulation, and any other material terms agreed by the parties, by the time performance is due from either party;
3.1.2 Fail to provide to the buyer in writing an approximate completion date for all home improvements in a home improvement contract unless the home improvement contract clearly and conspicuously discloses that no completion date is provided;
3.1.3 Fail to fill in all the relevant final terms in a home improvement contract before it is signed by the buyer;
3.1.4 Structure a home improvement contract in such a way as to require the buyer to sign or signify assent to a proposal before it is binding on the home improvement contractor;
3.1.5 Fail to include the home improvement contractor's name, address, telephone number, website (if any), and e-mail address in a home improvement contract;
3.1.6 Fail to include in a home improvement contract proper notification of the buyer's right to cancel the home improvement contract if required pursuant to 6 Del.C. §4404(2);
3.1.7 Fail to include in a home improvement contract all affirmations of fact, promises, or descriptions which constitute express warranties under 6 Del.C. §2-313 or would so constitute express warranties if the sale of goods only were involved;
3.1.8 Fail to disclose in a home improvement contract all delivery and installment charges;
3.1.9 Fail to clearly and conspicuously disclose in a home improvement contract that a warranty only covers a product and does not cover the installation or delivery of the product, when such is the case;
3.1.10 Fail to disclaim on a separate page of a home improvement contract that the home improvement contractor is not responsible for their oral representations, promises, or assurances, when it is the intent of the home improvement contractor that their oral representations, promises, or assurances not be binding;
3.1.11 Fail to provide the buyer with a summary of these regulations, as prepared by the Consumer Protection Unit, as published on the Consumer Protection Unit website, prior to the buyer signing a home improvement contract;
3.1.12 Include a liquidated damages provision in a home improvement contract that would provide the home improvement contractor with the same amount of liquidated damages regardless of the amount of work completed;
3.1.13 Misrepresent the binding nature of a home improvement contract, such as by representing that a home improvement contract is an estimate;
3.1.14 Fail to complete the home improvement by the completion date as stated in a home improvement contract unless such home improvement is delayed by events beyond the home improvement contractor's control or the buyer has agreed in writing to a later date;
3.1.15 Where the contract price is to be calculated on a "cost plus" basis, fail to clearly and conspicuously state this fact along with the method of calculating additions to cost and a good faith estimate of the final contract price;
3.1.16 Disclaim, exclude, modify or otherwise attempt to limit any warranty, including the warranties of merchantability and fitness for a particular purpose, or to exclude, modify or attempt to limit any remedy provided by law, including the measure of damages available, for a breach of warranty, express or implied, except in a clear and conspicuous manner accompanied by the buyer's initials;
3.1.17 Represent that the buyer or prospective buyer has been specially selected to receive a bargain, discount, or other advantage that will reduce the cost of the merchandise, when the offer is available to all customers similarly situated or is otherwise not the case;
3.1.18 Represent to a prospective buyer that their dwelling or building is to serve as a lure for prospective buyers, "model home," "advertising job," or other similar inducement, and that a reduced price is offered for that reason, if such is not the case;
3.1.19 Represent to a prospective buyer that the buyer is being given an introductory, confidential, closeout, going-out-of-business, factory, or wholesale price discount, if such is not the case;
3.1.20 Represent to a prospective buyer that a price discount is being made due to materials left over from another job, if such is not the case;
3.1.21 Represent to a prospective buyer that the offer is a test of the local market or a market survey if such is not the case;
3.1.22 Represent to a prospective buyer that the prices offered are discounted, if such is not the case;
3.1.23 Where models or other exemplars are used to show the merchandise to be provided or services to be offered, represent that such models or exemplars are current when they are not current or are discontinued;
3.1.24 Represent that the merchandise being offered are current or state of the art, when, in fact, they are not current or state of the art, or are discontinued;
3.1.25 Misrepresent the quality, capacity, character, nature, manufacturer, or composition of any merchandise;
3.1.26 Misrepresent or falsely state that the buyer's present equipment, materials, goods, fixtures, or property are dangerous, defective, or in need of repair or replacement;
3.1.27 Present to a buyer for signature, or otherwise attempt to induce a buyer to sign, any certificate of completion before the relevant home improvement is actually completed;
3.1.28 Induce or persuade a buyer or prospective buyer to sign any writing when the home improvement contractor knows or has reason to know that the buyer or prospective buyer is unable to read or write, cannot read the language in which the instrument is written, or, after reading the instrument, does not understand the terms of the instrument;
3.1.29 Mislead the prospective buyer or buyer into believing that the down payment or some other figure constitutes the full amount they will be obligated to pay, or to omit or exclude any other obligations, fees, charges or costs to the buyer;
3.1.30 Gain entry or access to a prospective buyer's home or property under the false guise of performing a governmental, public utility or other official inspection, or to falsely represent that the home improvement contractor is acting on behalf of or as an employee of any governmental entity or public utility;
3.1.31 Represent that the home improvement contractor is an employee, officer or representative of a manufacturer, importer, or any other person, firm, organization, or that such person, firm, or organization will assume some obligation in fulfilling the terms of the contract, when such is not the case.
History
- 27 DE Reg. 254 (10/01/23)
Continue your research in ChatGPT or Claude
Connect Omnilex to search the legal corpus from your AI assistant.