Chapter DFI-Bkg 74

Chapter DFI-Bkg 74

COLLECTION AGENCIES

DFI-Bkg 74.01   Definitions.

DFI-Bkg 74.02   Office requirements.

DFI-Bkg 74.03   Other changes.

DFI-Bkg 74.04   Agreements and acknowledgments.

DFI-Bkg 74.05   Remittance statement.

DFI-Bkg 74.06   Trust fund account.

DFI-Bkg 74.07   Books and records.

DFI-Bkg 74.09   Licensee shall furnish report to creditor on written request.

DFI-Bkg 74.10   Procedure for return or cancellation of accounts.

DFI-Bkg 74.11   General.

DFI-Bkg 74.13   Fair collection practice notice.

DFI-Bkg 74.15   Unauthorized practice of law.

DFI-Bkg 74.16   Oppressive and deceptive practices prohibited.

DFI-Bkg 74.17   Use of data processing.

Ch. DFI-Bkg 74 Note Note: Chapter Bkg 74 as it existed on December 31, 1965 was repealed and a new chapter Bkg 74 was created effective January 1, 1966. Chapter Bkg 74 was renumbered Chapter DFI-Bkg 74 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 6. and 7., Stats., Register, June, 1997, No. 498, eff. 7-1-97. Chapter DFI-Bkg 74 as it existed on September 30, 2006 was repealed and a new chapter DFI-Bkg 74 was created, Register September 2006 No. 609, effective 10-1-06.

DFI-Bkg 74.01 DFI-Bkg 74.01 Definitions. In this chapter:

DFI-Bkg 74.01(1) (1) “Actual process of collection” means regularly receiving payments at periodic intervals, or debtor contacted within last 30 days and promise of payment received, or an account referred for legal actions where the collection agency has advanced legal costs. A collection agency and its client may by written contract agree to a different actual process of collection, but this different actual process of collection must require more effort on the part of the collection agency than merely listing the account, inputting the account into its database, writing one letter or making one call, or similar levels of effort.

DFI-Bkg 74.01(3) (3) “Division” means the division of banking.

DFI-Bkg 74.01(4) (4) “Health care billing companies” in s. 218.04 (1) (a), Stats., means a person under contract with a health care provider to collect or attempt to collect an account, which is not in default when forwarded from the health care provider, using only the health care provider’s name, and directing all payments to the health care provider or depositing all monies received directly into the health care provider’s account at a financial institution.

DFI-Bkg 74.01(5) (5) “Health care provider” means any of the following:

DFI-Bkg 74.01(5)(a) (a) An ambulatory surgery center as defined in 42 CFR 416.2.

DFI-Bkg 74.01(5)(b) (b) A health care provider as defined in s. 146.81 (1), Stats.

DFI-Bkg 74.01(5)(c) (c) An outpatient diagnostic facility as defined in 21 CFR 803.3.

DFI-Bkg 74.01(5)(d) (d) A person designated as a health care provider in writing by the division.

DFI-Bkg 74.01(5m) (5m) “Licensee” means a person licensed under s. 218.04, Stats.

DFI-Bkg 74.01(6) (6) “Merger” means the business combination of 2 or more collection agencies under s. 180.1101 or 183.1021, Stats., or other applicable law.

DFI-Bkg 74.01 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; CR 10-097: renum. (4) to be (6), cr. (4), (5) Register December 2010 No. 660, eff. 1-1-11; CR 23-039: am. (1), r. (2) (c), am. (2) (d), cr. (5m), am. (6) Register March 2024 No. 819, eff. 4-1-24; 2023 Wis. Act 267: am. (1), r. (2), cr. (5m) Register April 2024 No. 820, eff. 1-1-25; merger of (1), (5m) treatments by 2023 Wis. Act 267 and CR 23-039 made under s. 13.92 (4) (bm), Stats., Register April 2024 No. 820.

DFI-Bkg 74.02 DFI-Bkg 74.02 Office requirements.

DFI-Bkg 74.02(1) (1) Shared office space.

DFI-Bkg 74.02(1)(a) (a) Except as set forth in par. (b), the licensed office of a collection agency may not be shared or have a common waiting room with a practicing attorney or a loan company or be located in a private residence. If other approved business is conducted in the same office as provided for in s. 218.04 (4) (b), Stats., the books and records of such other business shall be kept separate from the books and records of the collection agency.

DFI-Bkg 74.02(1)(b) (b) A collection agency may share its licensed office with a practicing attorney if the attorney is an employee of the collection agency. This chapter and s. 218.04, Stats., apply to an attorney who shares office space under this paragraph.

DFI-Bkg 74.02(2) (2) Office hours. Every licensee shall maintain regular office hours on business days from Monday through Friday and shall be open for business at least 3 hours each day between the hours of 9:00 a.m. and 5:00 p.m. Whenever an office is not open for business at least 6 hours a day between the hours of 9:00 a.m. and 5:00 p.m., a written notice shall be filed with the division setting forth the schedule of office hours.

DFI-Bkg 74.02 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; CR 23-039: renum. (1) (a) (title) to (1) (title), am. (1) (a) Register March 2024 No. 819, eff. 4-1-24.

DFI-Bkg 74.03 DFI-Bkg 74.03 Other changes. Each licensee shall keep current and accurate all material information on file with the division and the nationwide multistate licensing system and registry as provided in s. 224.35 (6), Stats. The licensee shall provide any additional information, data, and records regarding a change to the division within 20 days after the division requests the information, data, or records. Any change that is subject to the notice requirement shall be subject to the approval of the division. In reviewing the change, the division shall apply the same criteria as the criteria for approval of an original license application. Except in the case of a relocation, the division shall determine the cost of investigating and processing the change. The licensee shall pay the division’s cost within 30 days after the division demands payment. If so directed by the division, the licensee shall provide any notice required under this subsection to the nationwide multistate licensing system and registry as provided in s. 224.35, Stats.

DFI-Bkg 74.03 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; 2023 Wis. Act 267: am. (title), r. (1), am. (2) Register April 2024 No. 820, eff. 1-1-25; (2) (title) repealed under s. 13.92 (4) (b) 2., Stats., and renumber (2) under s. 13.92 (4) (b) 1., Stats., Register April 2024 No. 820.

DFI-Bkg 74.04 DFI-Bkg 74.04 Agreements and acknowledgments.

DFI-Bkg 74.04(1) (1) Agreement with creditor. Prior to accepting accounts for collection from a creditor or earning or collecting a fee or commission, the licensee shall enter into a written agreement with the creditor. The agreement shall do all of the following:

DFI-Bkg 74.04(1)(a) (a) Be executed and dated by both parties.

DFI-Bkg 74.04(1)(b) (b) Indicate whether the licensee is authorized to add interest, collection charges, or fees to the accounts listed for collection and identify the interest rate, charge, or fee amount.

DFI-Bkg 74.04(1)(c) (c) Identify the licensee’s rate of commission. The licensee may not charge a higher commission rate on interest or other charges and fees collected than is charged on the principal amount unless the agreement authorizes a higher commission rate. Licensee may not retain the higher rate of charge until the principal amount listed as owing has been collected in full.

DFI-Bkg 74.04(1)(d) (d) List any other fees that the creditor may be charged.

DFI-Bkg 74.04(1m) (1m) Prohibitions. Except as provided in s. DFI-Bkg 74.10 (1) (c), an agreement described under sub. (1) may not permit a collection agency to charge the creditor for returning any account to the creditor.

DFI-Bkg 74.04(2) (2) Acknowledgment. Upon receipt of any account for collection, the licensee shall furnish the creditor or forwarder with an acknowledgment, a duplicate or copy of which shall be kept in the office of the licensee. The acknowledgment shall list the accounts by name of debtor, date the account was listed, and principal amount and other charges to be collected.

DFI-Bkg 74.04(3) (3) Written statement. An acknowledgement containing the information required by sub. (2) need not be sent to the creditor or forwarder for each listing if the creditor or forwarder provides a written statement indicating their desire not to receive the acknowledgment.

DFI-Bkg 74.04 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; CR 23-039: am. (1) (intro.), renum. (1) (e) to (1m) and am. Register March 2024 No. 819, eff. 4-1-24; 2023 Wis. Act 267: am. (1) (intro.) Register April 2024 No. 820, eff. 1-1-25; merger of (1) (intro.) treatments by 2023 Wis. Act 267 and CR 23-039 made under s. 13.92 (4) (bm), Stats., Register April 2024 No. 820.

DFI-Bkg 74.05 DFI-Bkg 74.05 Remittance statement.

DFI-Bkg 74.05(1) (1) Remittance statement to be furnished each creditor. A licensee shall provide a remittance statement and remit any money due to a creditor or forwarder on or before the last day of the month following the close of the month during which the collection was effected as provided in s. 218.04 (5) (a) 4., Stats. The remittance statement shall set forth all of the following:

DFI-Bkg 74.05(1)(a) (a) Date of remittance.

DFI-Bkg 74.05(1)(b) (b) Debtor’s name.

DFI-Bkg 74.05(1)(c) (c) Date of collection and amount collected from each debtor which shall include interest and other charges. Attorney fees, court costs or suit fees if paid by or charged to the creditor and non-sufficient fund fees assessed by the creditor shall be included as other charges. Fees permitted and collected pursuant to s. DFI-Bkg 74.11 (2) (b) to (d) may not be included as other charges.

DFI-Bkg 74.05(1)(d) (d) Distribution of money collected from each debtor including interest and non-sufficient fund fees assessed by the creditor, if any, showing the amount due the licensee as commission and the amount due the creditor or forwarder.

DFI-Bkg 74.05(2) (2) Duplicate copy of remittance statement to be retained by licensee. A duplicate copy of each remittance statement furnished a creditor or forwarder shall be available in the office of the licensee and shall be filed by the month in which it was issued either alphabetically or by claimant number.

DFI-Bkg 74.05 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; CR 23-039: am. (1) (intro.), (c) Register March 2024 No. 819, eff. 4-1-24; 2023 Wis. Act 267: am. (1) (intro.) Register April 2024 No. 820, eff. 1-1-25; merger of (1) (intro.) treatments by 2023 Wis. Act 267 and CR 23-039 made under s. 13.92 (4) (bm), Stats., Register April 2024 No. 820.

DFI-Bkg 74.06 DFI-Bkg 74.06 Trust fund account.

DFI-Bkg 74.06(1) (1) A licensee’s trust checking account shall be identified as a “trust account.”

DFI-Bkg 74.06(2) (2) A licensee may maintain trust funds in an interest-bearing savings account or instrument provided it is identified as a “trust account.”

DFI-Bkg 74.06(3) (3) Sufficient funds shall be maintained in the trust account or trust accounts to pay all moneys due or owing all creditors or forwarders. For the purpose of determining sufficient funds, amounts collected by a 3rd party, but not yet deposited into the licensee’s trust account, are not considered trust funds.

DFI-Bkg 74.06(4) (4) Sufficient funds shall be maintained in the trust checking account on which remittance checks or electronic debits are drawn or made to pay all checks and debits when presented.

DFI-Bkg 74.06(5) (5) The licensee shall have sufficient documentation from the trust account or trust accounts available to make an adequate examination.

DFI-Bkg 74.06(6) (6) Third party payment processors shall not be given authority to withdraw funds from the licensee’s trust account or accounts.

DFI-Bkg 74.06 Note Note: Sub. (6) was created by 2023 Wis. Act 267. A similar provision with the same numbering was created by CR 23-039. Sub. (6) is shown as created by 2023 Wis. Act 267. As created by CR 23-039, it reads:

DFI-Bkg 74.06 Note (6) Third party payment processors may not be given authority to withdraw funds from the licensee’s trust account.

DFI-Bkg 74.06 History History: CR 06-045: cr. Register September 2006 No. 609, eff. 10-1-06; CR 23-039: renum. DFI-Bkg 74.06 to (2) to (5) and, as renumbered, am. (2) to (4), cr. (1), (6) Register March 2024 No. 819, eff. 4-1-24; 2023 Wis. Act 267: renum. DFI-Bkg 74.06 to (2) to (5) and, as renumbered, am. (2) to (4), cr. (1), (6) Register April 2024 No. 820, eff. 1-1-25; merger of (1) to (5) treatments by 2023 Wis. Act 267 and CR 23-039 made under s. 13.92 (4) (bm), Stats., and Register April 2024 No. 820.

DFI-Bkg 74.07 DFI-Bkg 74.07 Books and records.

DFI-Bkg 74.07(1) (1) Records to be maintained. Every licensee shall maintain in the principal licensed office adequate records which shall include all of the following:

DFI-Bkg 74.07(1)(a) (a) A daily collection record or cash receipt journal in which all collections are recorded and allocated as to total collections, setting forth all of the following:

DFI-Bkg 74.07(1)(a)1. 1. The amount credited to principal, interest, and other charges, such other charges to include non-sufficient fund fees assessed by the creditor, any fees permitted and collected pursuant to s. DFI-Bkg 74.11 (2) (b) to (d), attorney’s fees and court costs.

DFI-Bkg 74.07(1)(a)2. 2. The amount due creditors or forwarders.

DFI-Bkg 74.07(1)(a)3. 3. The amount retained as commission or commission paid to forwardees.

DFI-Bkg 74.07(1)(a)4. 4. Paid directs reported and paid direct commissions received.

DFI-Bkg 74.07(1)(a)5. 5. The debtor’s name.

DFI-Bkg 74.07(1)(a)6. 6. The date of collection.

DFI-Bkg 74.07(1)(a)7. 7. The creditor’s name or a code that identifies the creditor.

DFI-Bkg 74.07(1)(b) (b) A record consisting of asset and liability accounts including a continuous record of all physical assets such as furniture, fixtures and office equipment.

DFI-Bkg 74.07(1)(c) (c) A record of income and expenses.

DFI-Bkg 74.07(1)(d) (d) A record of each debtor’s account shall be maintained consisting of all of the following:

DFI-Bkg 74.07(1)(d)1. 1. The name and address of the debtor, creditor, forwarder and forwardee if the account has been forwarded.

DFI-Bkg 74.07(1)(d)2. 2. The original amount listed, the principal amount owing and, if available, the date of the last credit or debit.

DFI-Bkg 74.07(1)(d)3. 3. The amount of interest, cost of legal action instituted, or other charges, if any, and a description thereof.

DFI-Bkg 74.07(1)(d)4. 4. The amount and date of each payment made by the debtor allocating moneys paid to the amount owing, interest, costs and other charges.

DFI-Bkg 74.07(1)(d)5. 5. The current balance due.

DFI-Bkg 74.07(1)(e) (e) Check stubs or transaction registers that disclose all debits to the trust and operating accounts. These stubs or transaction registers shall include all of the following: