South Carolina General Assembly
113th Session, 1999-2000

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Bill 478


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                      478
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  19990209
Primary Sponsor:                  Short
All Sponsors:                     Short, Gregory and Jackson
Drafted Document Number:          l:\s-res\lhs\007repo.kad.doc
Residing Body:                    Senate
Current Committee:                Banking and Insurance Committee 02 SBI
Subject:                          Recovery agencies, licensure and 
                                  regulation of; Banks, Motor Vehicles, Consumer 
                                  Affairs, Protection Code


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  19990209  Introduced, read first time,           02 SBI
                  referred to Committee


                             Versions of This Bill

View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND TITLE 37 OF THE CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CONSUMER PROTECTION CODE, BY ADDING CHAPTER 17, SO AS TO PROVIDE FOR THE LICENSURE AND REGULATION OF RECOVERY AGENCIES.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Title 37 of the 1976 Code is amended by adding:

"CHAPTER 17

Section 37-17-10. The General Assembly recognizes that the recovery industry is a rapidly expanding field that requires regulation to ensure that the interests of the public will be adequately served and protected. The General Assembly recognizes that untrained persons, unlicensed persons or businesses, or persons who are not of good moral character engaged in the recovery industry are a threat to the welfare of the public if placed in positions of trust. Regulation of licensed and unlicensed persons and businesses engaged in this field is therefore deemed necessary.

Section 37-17-20. For purposes of this chapter, the following terms have the following meanings:

(1) `Department' means the Department of Consumer Affairs.

(2) `Person' means any individual, firm, company, agency, organization, partnership, or corporation.

(3) `Licensee' means any person licensed under this chapter.

(4) The personal pronoun `he' or the personal pronoun `she' implies the impersonal pronoun `it'.

(5) `Principal officer' means an individual who holds the office of president, vice president, secretary, or treasurer in a corporation.

(6) `Advertising` means the submission of bids, contracting, or making known by any public notice or solicitation of business, directly or indirectly, that services regulated under this chapter are available for consideration.

(7) `Good moral character' means a personal history of honesty, fairness, and respect for the rights and property of others and for the laws of this state and nation.

(8) `Conviction' means an adjudication of guilt by a federal or state court resulting from plea or trial, regardless of whether imposition of sentence was suspended.

(9) `Unarmed' means that no firearm shall be carried by the licensee while providing services regulated by this chapter.

(10) `Branch office' means each additional location of an agency where business is actively conducted which advertises as performing or is engaged in the business authorized by the license.

(11) `Sponsor' means any Class `E' or Class `MR' licensee who supervises and maintains under his or her direction and control a Class `EE' intern.

(12) `Intern' means an individual who studies as a trainee or apprentice under the direction and control of a designated sponsoring licensee.

(13) `Manager' means any licensee who directs the activities of licensees at any agency or branch office. The manager shall be assigned to and shall primarily operate from the agency or branch office location for which he or she has been designated as manager.

(14) `Recovery agency' means any person who, for consideration, advertises as providing or is engaged in the business of performing repossessions.

(15) `Recovery agent' means any individual who, for consideration, advertises as providing or performs repossessions.

(16) `Repossession' means the recovery of a motor vehicle, mobile home, or motorboat by an individual who is authorized by the legal owner, lienholder, or lessor to recover, or to collect money payment in lieu of recovery of, that which has been sold or leased under a security agreement that contains a repossession clause. A repossession is complete when a licensed recovery agent is in control, custody, and possession of such motor vehicle, mobile home, or motorboat.

Section 37-17-30. This chapter shall not apply to:

(1) Any individual solely, exclusively, and regularly employed as an unarmed recovery agent in connection with the business of her or his employer, when there exists an employer-employee relationship.

(2) Any attorney in the regular practice of her or his profession.

(3) Any bank or bank holding company, credit union, restricted lender, supervised lender, or any collection agency not engaged in repossessions or to any permanent employee thereof.

(4) Any person who holds a professional license under the laws of this state when such person is providing services or expert advice in the profession or occupation in which that person is so licensed.

Section 37-17-40. The department shall adopt rules necessary to administer this chapter. However, no rule shall be adopted that unreasonably restricts competition or the availability of services requiring licensure pursuant to this chapter or that unnecessarily increases the cost of such services without a corresponding or equivalent public benefit.

Section 37-17-50. (1) Any person, firm, company, partnership, or corporation which engages in business as a recovery agency shall have a Class `R' license. A Class `R' license is valid for only one location.

(2) Each branch office of a Class `R' agency shall have a Class `RR' license.

(3) Any individual who performs the services of a manager for a Class `R' recovery agency or a Class `RR' branch office must have a Class `MR' license. A Class `E' licensee may be designated as the manager, in which case the Class `MR' license is not required.

(4) Any individual who performs the services of a recovery agent must have a Class `E' license.

(5) Any individual who performs repossession as an intern under the direction and control of a designated, sponsoring Class `E' licensee or a designated, sponsoring Class `MR' licensee shall have a Class `EE' license.

(6) Class `E' or Class `EE' licensees shall own or be an employee of a Class `R' agency or branch office.

(7) Any person who operates a repossessor school or training facility shall have a Class `RS' license.

(8) Any individual who teaches or instructs at a Class `RS' repossessor school or training facility shall have a Class `RI' license.

Section 37-17-60. (1) Each individual, partner, or principal officer in a corporation, shall file with the department a complete application accompanied by an application fee not to exceed sixty dollars. The application fee shall not be refundable.

(a) The application submitted by any individual, partner, or corporate officer shall be approved by the department prior to that individual, partner, or corporate officer assuming his or her duties.

(b) Individuals who invest in the ownership of a licensed agency, but do not participate in, direct, or control the operations of the agency shall not be required to file an application.

(2) Each application shall be signed by the individual under oath and shall be notarized.

(3) The application shall contain the following information concerning the individual signing same:

(a) Name and any aliases.

(b) Age and date of birth.

(c) Place of birth.

(d) Social security number or alien registration number, whichever is applicable.

(e) Present residence address and his or her residence addresses within the five years immediately preceding the submission of the application.

(f) Occupations held presently and within the five years immediately preceding the submission of the application.

(g) A statement of all convictions.

(h) A statement whether he or she has ever been adjudicated incompetent.

(i) A statement whether he or she has ever been committed to a mental institution.

(j) A full set of fingerprints on a card provided by the department and a fingerprint fee to be established by rule of the department based upon costs determined by state and federal agency charges and department processing costs. An applicant who has, within the immediately preceding six months, submitted a fingerprint card and fee for licensing purposes under this chapter shall not be required to submit another fingerprint card or fee.

(k) A personal inquiry waiver which allows the department to conduct necessary investigations to satisfy the requirements of this chapter.

(l) Such further facts as may be required by the department to show that the individual signing the application is of good moral character and qualified by experience and training to satisfy the requirements of this chapter.

(4) In addition to the application requirements outlined in subsection (3), the applicant for a Class `E' or Class `EE' license shall submit two color photographs taken within the six months immediately preceding the submission of the application, which meet specifications prescribed by rule of the department. All other applicants shall submit one photograph taken within the six months immediately preceding the submission of the application.

(5) In addition to the application requirements outlined under subsection (3), the applicant for a Class `E' or Class `MR' license shall include a statement on a form provided by the department of the experience which he or she believes will qualify him or her for such license.

(6) In addition to the application requirements for individuals, partners, or officers outlined under subsection (3), the application for an agency license shall contain the following information:

(a) The proposed name under which the agency intends to operate.

(b) The street address, mailing address, and telephone numbers of the principal location at which business is to be conducted in this state.

(c) The street address, mailing address, and telephone numbers of all branch offices within this state.

(d) The names and titles of all partners or, in the case of a corporation, the names and titles of its principal officers.

(7) Upon submission of a complete application, a Class `EE', Class `E', or Class `MR' applicant may commence employment or appropriate duties for a licensed agency or branch office. However, the Class `E' applicant must work under the direction and control of a sponsoring licensee while his or her application is being processed. If the department denies application for licensure, the employment of the applicant must be terminated immediately, unless he or she performs only unregulated duties.

Section 37-17-70. (1) Each individual licensed by the department must:

(a) Be at least eighteen years of age.

(b) Be of good moral character.

(c) Not have been adjudicated incompetent under the law of any state, unless her or his capacity has been judicially restored; not have been involuntarily placed in a treatment facility for the mentally ill under the law of any state, unless her or his competency has been judicially restored; and not have been diagnosed as having an incapacitating mental illness, unless a psychologist or psychiatrist licensed in this state certifies that she or he does not currently suffer from the mental illness.

(d) Not be a chronic and habitual user of alcoholic beverages to the extent that her or his normal faculties are impaired.

(e) Not have been committed for controlled substance abuse or have been found guilty of a crime under Chapter 53, Title 44, or a similar law relating to controlled substances in any other state within a three-year period immediately preceding the date the application was filed, unless the individual establishes that she or he is not currently abusing any controlled substance and has successfully completed a rehabilitation course.

(f) Be a citizen or legal resident alien of the United States or have been granted authorization to seek employment in this country by the United States Immigration and Naturalization Service.

(2) Each agency shall have a minimum of one physical location within this state from which the normal business of the agency is conducted, and this location shall be considered the primary office for that agency in this state.

(a) If an agency desires to change the physical location of the business, as it appears on the agency license, the department must be notified within 10 days of the change, and, except upon renewal, the fee prescribed in Section 37-17-80 must be submitted for each license requiring revision. Each license requiring revision must be returned with such notification.

(b) The Class `R' license and any branch office or school license shall at all times be posted in a conspicuous place at the licensed physical location in this state where the business is conducted.

(c) Each Class `R', branch office, or school licensee shall display, in a place that is in clear and unobstructed public view, a notice on a form prescribed by the department stating that the business operating at this location is licensed and regulated by the department and that any questions or complaints should be directed to the department.

(d) A minimum of one properly licensed manager shall be designated for each agency and branch office location.

(3) Each Class `E', Class `EE', Class `MR', or Class `RI' licensee shall notify the department in writing within ten days of a change in her or his residence or mailing address.

(4) In addition to the license requirements set forth in this chapter, each individual or agency shall comply with the following additional requirements:

(a) Each agency or branch office must designate a minimum of one appropriately licensed individual to act as manager, directing the activities of the Class `E' or Class `EE' employees. A Class `E' licensee may be designated to act as manager of a Class `R' agency or branch office in which case the Class `MR' license is not required.

(b) An applicant for Class `MR' license shall have at least one year of lawfully gained, verifiable, full-time experience as a Class `E' licensee performing repossessions of motor vehicles, mobile homes, or motorboats.

(c) An applicant for a Class `E' license shall have at least one year of lawfully gained, verifiable, full-time experience in one, or a combination of more than one, of the following:

1. Repossession of motor vehicles, mobile homes, or motorboats.

2. Work as a Class `EE' licensed intern.

(5) An applicant for a Class `E' or a Class `EE' license must have completed a minimum of forty hours of professional training at a school or training facility licensed by the department. The department shall by rule establish the general content for the training.

Section 37-17-80. (1) The department shall establish by rule biennial license fees which shall not exceed the following:

(a) Class `R' license--recovery agency: four hundred fifty dollars.

(b) Class `RR' license--branch office: one hundred twenty-five dollars.

(c) Class `MR' license--recovery agency manager: seventy-five dollars.

(d) Class `E' license--recovery agent: seventy-five dollars.

(e) Class `EE' license--recovery agent intern: sixty dollars.

(f) Class `RS' license--repossessor school or training facility: sixty dollars.

(g) Class `RI' license--repossessor school or training facility instructor: sixty dollars.

(2) The department may establish by rule a fee for the replacement or revision of a license, which fee shall not exceed thirty dollars.

(3) The fees set forth in this section must be paid by certified check or money order, or, at the discretion of the department, by agency check at the time the application is approved, except that the applicant for a Class `E', Class `EE', or Class `MR' license must pay the license fee at the time the application is made. If a license is revoked or denied, or if an application is withdrawn, the license fee shall not be refunded.

(4) The department may prorate license fees.

(5) Payment of any license fee provided for under this chapter authorizes the licensee to practice his or her profession anywhere in this state without obtaining any additional license, permit, registration, or identification card, any municipal or county ordinance or resolution to the contrary notwithstanding. However, an agency may be required to obtain a municipal or county business license in each city and county where the agency maintains a physical office.

Section 37-17-90. (1) Except as otherwise provided, prior to the issuance of a license under this chapter, the department shall make an investigation of the applicant for a license. The investigation shall include:

(a)1. An examination of fingerprint records and police records.

2. If a legible set of fingerprints, as determined by SLED or the FBI, cannot be obtained after two attempts, the department may determine the applicant's eligibility based upon a criminal history record check under the applicant's name conducted by SLED and the. A set of fingerprints taken by a law enforcement agency and a written statement signed by the fingerprint technician or a licensed physician stating that there is a physical condition that precludes obtaining a legible set of fingerprints or that the fingerprints taken are the best that can be obtained is sufficient to meet this requirement.

(b) An inquiry to determine if the applicant has been adjudicated incompetent or has been committed to a mental institution.

(c) Such other investigation of the individual as the department may deem necessary.

Section 37-17-100. (1) The department may adopt rules for:

(a) Entering into reciprocal agreements with other states or territories of the United States for the purpose of licensing persons to perform activities regulated under this chapter who are currently licensed to perform similar services in the other states or territories; or

(b) Allowing a person who is licensed in another state or territory to perform similar services in this state, on a temporary and limited basis, without the need for licensure in this state.

(2) The rules authorized in subsection (1) may be promulgated only if:

(a) The other state or territory has requirements which are substantially similar to or greater than those established in this chapter.

(b) The applicant has engaged in licensed activities for at least one year in the other state or territory with no disciplinary action against him or her.

(c) The appropriate authority of the other state or territory agrees to accept service of process for those licensees who are operating in this state on a temporary basis.

Section 37-17-110. No agency license shall be issued unless the applicant first files with the department a certification of insurance evidencing coverage as delineated below. The coverage shall provide the department as an additional insured for the purpose of receiving all notices of modification or cancellation of such insurance. Coverage shall be written by an insurance company which is lawfully engaged to provide insurance coverage in South Carolina. Coverage shall provide for a combined single-limit policy in the amount of at least three hundred thousand dollars, which policy shall include comprehensive general liability coverage for death, bodily injury, property damage, and personal injury coverage including false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, and violation of the right of privacy. Coverage shall insure for the liability of all employees licensed by the department while acting in the course of their employment.

(1) The licensed agency shall notify the department of any claim against such insurance.

(2) The licensed agency shall notify the department immediately upon cancellation of the insurance policy, whether such cancellation was initiated by the insurance company or the insured agency.

(3) The agency license shall be automatically suspended upon the date of cancellation unless evidence of insurance is provided to the department prior to the effective date of cancellation.

Section 37-17-120. (1) All licenses issued pursuant to this chapter shall be on a form prescribed by the department and shall include the licensee's name, license number, expiration date of the license, and any other information the department deems necessary. Class `E', Class `EE', and Class `MR' licenses shall be in the possession of individual licensees while on duty.

(2) Licenses shall be valid for a period of two years, except for Class `R' and branch agency licenses, which shall be valid for a period of three years.

(3) The department shall, upon complete application and payment of the appropriate fees, issue a separate license to each branch office for which application is made.

(4) Notwithstanding the existence of a valid South Carolina corporate registration, no agency licensee may conduct activities regulated under this chapter under any fictitious name without prior written authorization from the department to use that name in the conduct of activities regulated under this chapter. The department may not authorize the use of a name which is so similar to that of a public officer or agency, or of that used by another licensee, that the public may be confused or misled thereby. No licensee shall be permitted to conduct business under more than one name except as separately licensed nor shall the license be valid to protect any licensee who is engaged in the business under any name other than that specified in the license. An agency desiring to change its licensed name shall notify the department and, except upon renewal, pay a fee not to exceed thirty dollars for each license requiring revision including those of all licensed employees. Upon the return of such licenses to the department, revised licenses shall be provided.

(5) It shall be the duty of every agency to furnish all of its partners, principal corporate officers, and all licensed employees an identification card. The card shall specify at least the name and license number, if appropriate, of the holder of the card and the name and license number of the agency and shall be signed by a representative of the agency and by the holder of the card.

(a) Each individual to whom a license and identification card have been issued shall be responsible for the safekeeping thereof and shall not loan, or let or allow any other individual to use or display, the license or card.

(b) The identification card shall be in the possession of each partner, principal corporate officer, or licensed employee while on duty.

(c) Upon denial, suspension, or revocation of a license, or upon termination of a business association with the licensed agency, it shall be the duty of each partner, principal corporate officer, manager, or licensed employee to return the identification card to the issuing agency.

(6) A licensed agency must include its agency license number in any advertisement in any print medium or directory, and must include its agency license number in any written bid or offer to provide services.

Section 37-17-130. (1) After filing the application, unless the department declines to issue the license or revokes it after issuance, an agency or school shall, within five working days of the withdrawal, removal, replacement, or addition of any or all partners or officers, notify and file with the department complete applications for such individuals. The agency's or school's good standing under this chapter shall be contingent upon the department's approval of any new partner or officer.

(2) Each agency or school shall, upon the employment or termination of employment of a licensee, report such employment or termination immediately to the department and, in the case of a termination, report the reason or reasons therefor. The report shall be on a form prescribed by the department.

Section 37-17-140. (1) A license granted under the provisions of this chapter shall be renewed biennially by the department, except for Class `R' and branch agency licenses, which shall be renewed every 3 years.

(2) No less than ninety days prior to the expiration date of the license, the department shall mail a written notice to the last known residence address for individual licensees and to the last known agency address for agencies.

(3) Each licensee shall be responsible for renewing his or her license on or before its expiration by filing with the department an application for renewal accompanied by payment of the prescribed license fee.

(a) Each Class `R' licensee shall additionally submit on a form prescribed by the department a certification of insurance which evidences that the licensee maintains coverage as required under Section 37-17-110.

(b) Each Class `RS' licensee shall additionally submit the current curriculum, examination, and list of instructors.

(4) A licensee who fails to file a renewal application on or before its expiration must renew his or her license by fulfilling the applicable requirements of subsection (3) and by paying a late fee equal to the amount of the license fee.

(5) No license shall be renewed three months or more after its expiration date. The applicant shall submit a new, complete application and the respective fees.

(6) A renewal applicant shall not perform any activity regulated by this chapter between the date of expiration and the date of renewal of his or her license.

Section 37-17-150. (1) In the event the licensee desires to cancel her or his license, she or he shall notify the department in writing and return the license to the department within ten days of the date of cancellation.

(2) The department, at the written request of the licensee, may place her or his license in inactive status. A license may remain inactive for a period of three years, at the end of which time, if the license has not been renewed, it shall be automatically canceled. If the license expires during the inactive period, the licensee shall be required to pay license fees and, if applicable, show proof of insurance before the license can be made active. No late fees shall apply when a license is in inactive status.

Section 37-17-160. (1) The provisions of this section shall apply to all licensees in addition to the other provisions of this chapter.

(2) No licensee is permitted to bear a firearm.

(3) No employee shall carry or be furnished a weapon or firearm unless carrying a weapon or firearm is required by her or his duties, nor shall an employee carry a weapon or firearm except in connection with those duties.

(4) No person is exempt from the requirements of this section by virtue of holding a concealable weapon permit pursuant to Article 4, Chapter 31, Title 23.

Section 37-17-170. (1) Only licensees may sponsor interns. A Class `E' or Class `MR' licensee may sponsor a Class `EE' recovery agent intern.

(2) An internship may not commence until the sponsor has submitted to the department the notice of intent to sponsor. Such notice shall be on a form provided by the department.

(3) The internship is intended to serve as a learning process. Sponsors shall assume a training status by providing direction and control of interns. Sponsors shall only sponsor interns whose place of business is within a fifty-mile distance of the sponsor's place of business and shall not allow interns to operate independently of such direction and control, or require interns to perform activities which do not enhance the intern's qualification for licensure.

(4) No sponsor may sponsor more than six interns at the same time.

(5) A sponsor shall certify a biannual progress report on each intern and shall certify completion or termination of an internship to the department within fifteen days after such completion or termination. The report must be made on a form provided by the department and must include at a minimum:

(a) The inclusive dates of the internship.

(b) A narrative part explaining the primary duties, types of experiences gained, and the scope of training received.

(c) An evaluation of the performance of the intern and a recommendation regarding future licensure.

Section 37-17-180. There is created within the state treasury the Recovery Agency Licensing Fund. All moneys required to be paid under this chapter shall be collected by the department and deposited in the trust fund. The General Assembly shall appropriate from the fund such amounts as it deems necessary for the purpose of administering the provisions of this chapter. The unencumbered balance in the trust fund at the beginning of the year shall not exceed $100,000, and any excess shall be transferred to the general fund unallocated.

Section 37-17-190. (1) The following constitute grounds for which disciplinary action specified in subsection (2) may be taken by the department against any licensee, agency, or applicant regulated by this chapter, or any unlicensed person engaged in activities regulated under this chapter.

(a) Fraud or willful misrepresentation in applying for or obtaining a license.

(b) Use of any fictitious or assumed name by an agency unless the agency has department approval.

(c) Being found guilty of or entering a plea of guilty or nolo contendere to, regardless of adjudication, or being convicted of a crime that directly relates to the business for which the license is held or sought. A plea of nolo contendere shall create a rebuttable presumption of guilt to the underlying criminal charges, and the department shall allow the individual being disciplined or denied an application for a license to present any mitigating circumstances surrounding his or her plea.

(d) A false statement by the licensee that any individual is or has been in his or her employ.

(e) A finding that the licensee or any employee is guilty of willful betrayal of a professional secret or any unauthorized release of information acquired as a result of activities regulated under this chapter.

(f) Proof that the applicant or licensee is guilty of fraud or deceit, or of negligence, incompetency, or misconduct, in the practice of the activities regulated under this chapter.

(g) Conducting activities regulated under this chapter without a license or with a revoked or suspended license.

(h) Failure of the licensee to maintain in full force and effect the general liability insurance coverage required by Section 37-17-110.

(i) Impersonating, or permitting or aiding and abetting an employee to impersonate, a law enforcement officer or an employee of the state, the United States, or any political subdivision thereof by identifying himself or herself as a federal, state, county, or municipal law enforcement officer or official representative, by wearing a uniform or presenting or displaying a badge or credentials that would cause a reasonable person to believe that he or she is a law enforcement officer or that he or she has official authority, by displaying any flashing or warning vehicular lights other than amber colored, or by committing any act that is intended to falsely convey official status.

(j) Commission of an act of violence or the use of force on any person except in the lawful protection of one's self or another from physical harm.

(k) Knowingly violating, advising, encouraging, or assisting the violation of any statute, court order, capias, warrant, injunction, or cease and desist order, in the course of business regulated under this chapter.

(l) Soliciting business for an attorney in return for compensation.

(m) Transferring or attempting to transfer a license issued pursuant to this chapter.

(n) Employing or contracting with any unlicensed or improperly licensed person or agency to conduct activities regulated under this chapter, or performing any act that assists, aids, or abets a person or business entity in engaging in unlicensed activity, when the licensure status was known or could have been ascertained by reasonable inquiry.

(o) Failure or refusal to cooperate with or refusal of access to an authorized representative of the department engaged in an official investigation pursuant to this chapter.

(p) Failure of any partner, principal corporate officer, or licensee to have his or her identification card in his or her possession while on duty.

(q) Failure of any licensee to have his or her license in his or her possession while on duty, as specified in Section 37-17-120.

(r) Failure or refusal by a sponsor to certify a biannual written report on an intern or to certify completion or termination of an internship to the department within fifteen working days.

(s) Failure to report to the department any person whom the licensee knows to be in violation of this chapter or the rules of the department.

(t) Violating any provision of this chapter.

(u) In addition to the grounds for disciplinary action prescribed in paragraphs (a) through (t), Class `R' recovery agencies, Class `E' recovery agents, and Class `EE' recovery agent interns are prohibited from committing the following acts:

1. Recovering a motor vehicle, mobile home, or motorboat that has been sold under a conditional sales agreement or under the terms of a chattel mortgage before authorization has been received from the legal owner or mortgagee.

2. Charging for expenses not actually incurred in connection with the recovery, transportation, storage, or disposal of a motor vehicle, mobile home, motorboat, or personal property.

3. Using any motor vehicle, mobile home, or motorboat that has been repossessed, or using personal property obtained in a repossession, for the personal benefit of a licensee or an officer, director, partner, manager, or employee of a licensee.

4. Selling a motor vehicle, mobile home, or motorboat recovered under the provisions of this chapter, except with written authorization from the legal owner or the mortgagee thereof.

5. Failing to notify the police or sheriff's department of the jurisdiction in which the repossessed property is recovered within two hours after recovery.

6. Failing to remit moneys, collected in lieu of recovery of a motor vehicle, mobile home, or motorboat, to the client within ten working days.

7. Failing to deliver to the client a negotiable instrument that is payable to the client, within 10 working days after receipt of such instrument.

8. Falsifying, altering, or failing to maintain any required inventory or records regarding disposal of personal property contained in or on a recovered motor vehicle, mobile home, or motorboat pursuant to Section 37-17-240(1).

9. Carrying any weapon or firearm when he or she is on private property and performing duties under his or her license whether or not he or she is licensed pursuant to Article 4, Chapter 31, Title 23.

10. Soliciting from the legal owner the recovery of property subject to repossession after such property has been seen or located on public or private property if the amount charged or requested for such recovery is more than the amount normally charged for such a recovery.

11. Wearing, presenting, or displaying a badge in the course of repossessing a motor vehicle, mobile home, or motorboat.

(2) When the department finds any violation of subsection (1), it may do one or more of the following:

(a) Deny an application for the issuance or renewal of a license.

(b) Issue a reprimand.

(c) Impose an administrative fine not to exceed one thousand dollars for every count or separate offense.

(d) Place the licensee on probation for a period of time and subject to such conditions as the department may specify.

(e) Suspend or revoke a license.

(3) The department may deny an application for licensure citing lack of good moral character only if the finding by the department of lack of good moral character is supported by clear and convincing evidence. In such cases, the department shall furnish the applicant a statement containing the findings of the department, a complete record of the evidence upon which the determination was based, and a notice of the rights of the applicant to an administrative hearing and subsequent appeal.

(4) Notwithstanding the provisions of subsection (1)(c) and subsection (2):

(a) If the applicant or licensee has been convicted of a felony, the department shall deny the application or revoke the license unless and until civil rights have been restored by the State of South Carolina or by a state acceptable to South Carolina and a period of 10 years has expired since final release from supervision.

(b) If the applicant or licensee has been found guilty of, entered a plea of guilty to, or entered a plea of nolo contendere to a felony and adjudication of guilt is withheld, the department shall deny the application or revoke the license until a period of three years has expired since final release from supervision.

(c) A plea of nolo contendere shall create a rebuttable presumption of guilt to the underlying criminal charges, and the department shall allow the person being disciplined or denied an application for a license to present any mitigating circumstances surrounding his or her plea.

(d) The grounds for discipline or denial cited in this subsection shall be applied to any disqualifying criminal history regardless of the date of commission of the underlying criminal charge. Such provisions shall be applied retroactively and prospectively.

(e) Upon revocation or suspension of a license, the licensee shall forthwith return the license which was suspended or revoked.

(f) The agency license and the approval or license of each officer, partner, or owner of the agency are automatically suspended upon entry of a final order imposing an administrative fine against the agency, until the fine is paid, if thirty calendar days have elapsed since the entry of the final order. All owners and corporate or agency officers or partners are jointly and severally liable for agency fines. Neither the agency license or the approval or license of any officer, partner, or owner of the agency may be renewed, nor may an application be approved if the owner, licensee, or applicant is liable for an outstanding administrative fine imposed under this chapter. An individual's approval or license becomes automatically suspended if a fine imposed against the individual or his or her agency is not paid within thirty days after the date of the final order, and remains suspended until the fine is paid. Notwithstanding the provisions of this subsection, an individual's approval or license may not be suspended nor may an application be denied when the licensee or the applicant has an appeal from a final order pending in any appellate court.

(5) An applicant or licensee shall be ineligible to reapply for the same class of license for a period of one year following final agency action resulting in the denial or revocation of a license applied for or issued under this chapter. This time restriction shall not apply to administrative denials wherein the basis for denial was:

(a) an inadvertent error or omission on the application;

(b) the experience documented by the department was insufficient at the time of application;

(c) the department was unable to complete the criminal background investigation due to insufficient information from SLED or the FBI, or any other applicable law enforcement agency; or

(d) failure to submit required fees.

Section 37-17-200. (1) Any person who violates any provision of this chapter, except Section 37-17-250, is guilty of a misdemeanor and, upon conviction, must be punished by a fine not exceeding one thousand dollars or by imprisonment for a term not exceeding sixty days, or both.

(2) Any person who is convicted of any violation of this chapter shall not be eligible for licensure for a period of five years.

(3) Any person who violates or disregards any cease and desist order issued by the department is guilty of a misdemeanor and, upon conviction, must be punished by a fine not exceeding one thousand dollars or by imprisonment for a term not exceeding sixty days, or both. In addition, the department may seek the imposition of a civil penalty not to exceed five thousand dollars.

(4) Any person who was an owner, officer, partner, or manager of a licensed agency at the time of any activity that is the basis for revocation of the agency or branch office license and who knew or should have known of the activity, shall have his or her personal licenses or approval suspended for three years and may not have any financial interest in or be employed in any capacity by a licensed agency during the period of suspension.

Section 37-17-210. (1) The department shall have the power to enforce the provisions of this chapter, irrespective of the place or location in which the violation occurred, and, upon the complaint of any person or on its own initiative, to cause to be investigated any suspected violation thereof or to cause to be investigated the business and business methods of any licensed or unlicensed person, agency or employee thereof, or applicant for licensure under this chapter.

(2) In any investigation undertaken by the department, each licensed or unlicensed person, applicant, agency, or employee shall, upon request of the department provide records and shall truthfully respond to questions concerning activities regulated under this chapter. Such records shall be maintained in this state for a period of two years at the principal place of business of the licensee, or at any other location within the state for a person whose license has been terminated, canceled, or revoked. Upon request by the department the records must be made available immediately to the department unless the department determines that an extension may be granted.

(3) The department shall have the authority to investigate any licensed or unlicensed person, firm, company, partnership, or corporation when such person, firm, company, partnership, or corporation is advertising as providing or is engaged in performing services which require licensure under this chapter or when a licensee is engaged in activities which do not comply with or are prohibited by this chapter; and the department shall have the authority to issue an order to cease and desist the further conduct of such activities, or seek an injunction, or take other appropriate action pursuant to Section 37-17-190 (2)(a) or (c).

(4) In the exercise of its enforcement responsibility and in the conduct of any investigation authorized by this chapter, the department shall have the power to subpoena and bring before it any person in the state, require the production of any papers it deems necessary, administer oaths, and take depositions of any persons so subpoenaed. If any person fails or refuses to comply with a proper subpoena to be examined or fails or refuses to answer any question about his qualifications or the business methods or business practices under investigation or refuses access to agency records in accordance with Section 37-17-200, the circuit court of the county wherein such person resides or where the department is located may issue an order on the application of the department requiring such person to comply with the subpoena and to testify. Such failure or refusal shall also be grounds for revocation, suspension, or other disciplinary action. The testimony of witnesses in any such proceeding shall be under oath before the department or its agents.

(5) The Attorney General shall represent the department in judicial proceedings seeking enforcement of this chapter, or upon an action by any party seeking redress against the department, and shall coordinate with the department in the conduct of any investigations incident to its legal responsibility.

(6) Any investigation conducted by the department pursuant to this chapter is exempt from Chapter 4, Title 30 until:

(a) the investigation of the complaint has been concluded and determination has been made by the department as to whether probable cause exists;

(b) the case is closed prior to a determination by the department as to whether probable cause exists; or

(c) the subject of the investigation waives her or his privilege of confidentiality.

Section 37-17-220. The residence telephone number and residence address of any Class `E' or Class `EE' licensee maintained by the department is confidential and exempt from the provisions of Chapter 4, Title 30, except that the department may provide this information to local, state, or federal law enforcement agencies. When the residence telephone number or residence address of such licensee is, or appears to be, the business telephone number or business address, this information shall be public record.

Section 37-17-230. (1) The department shall have the authority to periodically, through the publication of a newsletter, advise its licensees of information that the department or the advisory council determines is of interest to the industry. Additionally, this newsletter shall contain the name and locality of any licensed or unlicensed person or agency against which the department has filed a final order relative to an administrative complaint and shall contain the final disposition. This newsletter shall be published not less than two nor more than four times annually.

(2) The department shall develop and make available to each Class `E' licensee and all interns a pamphlet detailing in plain language the legal authority, rights, and obligations of his or her class of licensure. Within the pamphlet, the department should endeavor to present situations that the licensee may be expected to commonly encounter in the course of doing business pursuant to his or her specific license, and provide to the licensee information on his or her legal options, authority, limits to authority, and obligations. The department shall supplement this with citations to statutes and legal decisions, as well as a selected bibliography that would direct the licensee to materials the study of which would enhance his or her professionalism. The department shall provide a single copy of the appropriate pamphlet without charge to each individual to whom a license is issued, but may charge for additional copies to recover its publication costs. The pamphlet shall be updated every two years as necessary to reflect rule or statutory changes, or court decisions. Intervening changes to the regulatory situation shall be noticed in the industry newsletter issued pursuant to subsection (1).

Section 37-17-240. (1) If personal effects or other property not covered by a security agreement are contained in or on a recovered vehicle, mobile home, or motorboat at the time it is recovered, a complete and accurate inventory shall be made of such personal effects or property. The date and time the inventory is made shall be indicated, and it shall be signed by the Class `E' or Class `EE' licensee who obtained the personal property. The inventory of the personal property and the records regarding any disposal of personal property shall be maintained for a period of two years in the permanent records of the licensed agency and shall be made available, upon demand, to an authorized representative of the department engaged in an official investigation.

(2) Within five working days after the date of a repossession, the Class `E' or Class `EE' licensee shall give written notification to the debtor of the whereabouts of personal effects or other property inventoried pursuant to this section. At least forty-five days prior to disposing of such personal effects or other property, the Class `E' or Class `EE' licensee shall, by United States Postal Service proof of mailing or certified mail, notify the debtor of the intent to dispose of said property. Should the debtor, or her or his lawful designee, appear to retrieve the personal property, prior to the date on which the Class `E' or Class `EE' licensee is allowed to dispose of the property, the licensee shall surrender the personal property to that individual upon payment of any reasonably incurred expenses for inventory and storage. If personal property is not claimed within forty-five days of the notice of intent to dispose, the licensee may dispose of the personal property at her or his discretion, except that illegal items or contraband shall be surrendered to a law enforcement agency, and the licensee shall retain a receipt or other proof of surrender as part of the inventory and disposal records she or he maintains.

(3) Vehicles used for the purpose of repossession by a Class `E' or Class `EE' licensee must be identified during repossession by the license number of the Class `R' agency only. The license number must be displayed on both sides of the vehicle and must appear in lettering no less than four inches tall and in a color contrasting from that of the background.

Section 37-17-250. (1) A Class `E' or Class `EE' licensee shall obtain, prior to sale, written authorization and a negotiable title from the owner or lienholder to sell any repossessed motor vehicle, mobile home, or motorboat.

(2) A Class `E' or Class `EE' licensee shall send the net proceeds from the sale of such repossessed motor vehicle, mobile home, or motorboat to the owner or lienholder, within twenty working days after the licensee executes the documents which permit the transfer of legal ownership to the purchaser.

(3) A person who violates a provision of this section is guilty of a felony, and upon conviction, must be sentenced to imprisonment for not more than five years or a fine of not more than ten thousand dollars, or both.

Section 37-17-260. (1) Any school, training facility, or instructor who offers the training outlined in Section 37-17-230 for Class `EE' applicants shall, before licensure of such school, training facility, or instructor, file with the department an application accompanied by an application fee in an amount to be determined by rule, not to exceed sixty dollars. The fee shall not be refundable.

(2) The application shall be signed and notarized and shall contain, at a minimum, the following information:

(a) The name and address of the school or training facility and, if the applicant is an individual, his or her name, address, and social security or alien registration number.

(b) The street address of the place at which the training is to be conducted.

(c) A copy of the training curriculum and final examination to be administered.

(3) The department shall adopt rules establishing the criteria for approval of schools, training facilities, and instructors.

Section 37-17-270. No person or licensee shall use any facsimile reproduction or pictorial portion of the state seal of the State of South Carolina on any badge, credentials, identification card, or other means of identification used in connection with any activities regulated under this chapter.

Section 37-17-280. The department shall maintain statistics and relevant information for recovery agents which details:

(1) The number of complaints received and investigated.

(2) The number of complaints initiated and investigated by the department.

(3) The disposition of each complaint.

(4) The number of administrative complaints filed by the department.

(5) The disposition of all administrative complaints.

(6) A description of all disciplinary actions taken."

SECTION 2. This act takes effect upon approval by the Governor.

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This web page was last updated on Wednesday, December 9, 2009 at 9:06 A.M.