59.1-335.4 - Bond or letter of credit required. - Virginia Statutes

§ 59.1-335.4. Bond or letter of credit required.

A. Every credit services business, before it enters into a contract with aconsumer, shall file and maintain with the Commissioner, in form andsubstance satisfactory to him, a bond with corporate surety from a companyauthorized to transact business in the Commonwealth, or a letter of creditfrom a bank insured by the Federal Deposit Insurance Corporation in an amountequal to 100 times the standard fee charged by the credit services businessbut in no event shall the bond or letter of credit required under thissection be less than $5,000 or greater than $50,000.

B. The required bond or letter of credit shall be in favor of theCommonwealth of Virginia for the benefit of any person who is damaged by anyviolation of this Act. The bond or letter of credit shall also be in favorof any person damaged by such practices. Any person claiming against thebond or letter of credit for a violation of this Act may maintain an actionat law against the credit services business and against the surety or bank.The surety or bank shall be liable only for actual damages and attorneys feesand not for penalties permitted under §§ 59.1-206 and 59.1-335.12 or punitivedamages permitted under § 59.1-335.10. The aggregate liability of the suretyor bank to all persons damaged by a credit services business violation ofthis chapter shall in no event exceed the amount of the bond or letter ofcredit.

C. The bond or letter of credit shall be maintained for a period of two yearsafter the date that the credit services business ceases operation.

(1989, c. 655.)