Which place’s debt rules apply—and who can help?

SettleADebt — S_AR PASS-08

Arkansas credit-services and credit-repair organizations: classification, security, contracts, cancellation, refunds, and limited remedies

Research access date: October 27, 2026. Exact source-opening times were not logged and are unknown. The supplied October 22 baseline is not a claim of current verification.

Provenance: Earlier raw answers remain unchanged. The reviewed PASS-02 distinction between state security conditions, federal CROA performance requirements, and TSR timing is preserved. The material provisions discussed below were freshly examined for this pass. PASS-04 through PASS-07 were not used as legal premises. No local coordinator files were accessed or written.

Scope: The Arkansas credit-repair-services framework and necessary overlapping registration, contract, cancellation, security, and federal requirements. No actual organization, contract, exemption, fee entitlement, cancellation, or claim is approved.

Principal findings

Arkansas’s statute reaches more than services marketed as “credit repair.” Its definition includes specified credit-improvement, credit-obtaining, lender-location, installment-loan, and advice services offered for consideration. But its unusual definitions of buyer, consumer, and extension of credit must also be applied. A marketing label cannot resolve coverage. C001–C009. Justia Law

The $10,000 bond and insured Arkansas trust account are conditions of a state advance-charge exception—not a general credit-repair license. They are cumulative. The disclosure provision’s reference to a bond or trust account does not change the advance-charge provision’s and. No dedicated credit-repair registration application, renewal cycle, or government charge was established from § 4-91-202 itself. A separate telephonic-seller regime can apply to particular sales practices, and it has different registration and security requirements. C020–C030, C095–C108. Justia Law+1

Two important drafting differences cannot be silently corrected. The state provision says contract copies are supplied at cancellation, whereas CROA requires copies at signing. The state disclosure describes a thirty-day adverse-credit file request, while the current federal free-file provision uses sixty days for its qualifying notice. These discrepancies require accurate, cumulative compliance analysis—not substitution of whichever wording seems more convenient. C037, C046, C069–C072. Justia Law+2

The old Arkansas credit-services damages provision was repealed. The current state section directs violations into the Arkansas Deceptive Trade Practices Act, whose private-action predicates differ from the repealed provision. Federal CROA separately retains its conditional damages measure, punitive-damages provision, and fee-shifting rule. Neither creates an automatic refund or judgment merely because a consumer alleges a defect. C056–C062, C073–C075. Arkansas Legislature+2

For covered telemarketing credit repair, complete performance alone is not the entire payment test. The represented service timeframe must have expired, and the seller must have provided the required results report, issued more than six months after the results were achieved. Both events precede payment request or receipt; the rule does not require one of those two events to occur before the other. An early-issued report does not become compliant merely by aging. C076–C083. eCFR

Throughout this report, S001 means S_AR-P08-S001, and C001 means S_AR-P08-C001. The source register supplies the full URLs and reading limits.

A. State classification and exclusions

A1. Definitions and service models

The operative state framework examined is the Credit Repair Services Organizations Act of 2017, enacted by Act 944 and displayed in the 2025 reproduction of § 4-91-202. Act 944’s approval is verified; a complete current official codification and every subsequent amendment were not obtained. That is a currentness limitation, not a finding that the displayed text is wrong. C001, C089.

The statutory advice clause expressly cross-references the first three listed service categories; it does not expressly repeat the fourth installment-loan category in that cross-reference. That drafting detail is preserved rather than rewritten. Justia Law

A2. Every listed state exclusion

These are exclusions from the state definition, not blanket exemptions from all consumer-protection, lending, professional, federal, or telemarketing law.

There is no general employee, salesperson, independent-contractor, education-provider, or affiliate exclusion in this list. The prohibited-practices subsection expressly includes specified sales personnel, representatives, and independent contractors. In a proceeding under the subchapter, the person claiming an exemption or exception bears the statutory burden. C018–C019. Justia Law

The federal incorporated nonprofit, creditor, depository-institution, and credit-union definitions were read where material. The complete HUD approval framework, securities licensing statutes, and all affiliate-definition chains were not completed. No actual exemption is established.

B. Registration and security

B1. What § 4-91-202 establishes

The security requirements are a conditional exception to one state timing prohibition, not a certificate of overall authorization. Justia Law

B2. Loan charges and interest are a separate restriction

Section 202(b) invokes § 4-57-104 for loans obtained under the section. It also treats the specified amounts paid or payable to the organization beyond the lender-provided amount as interest for that purpose.

Section 4-57-104 incorporates the applicable limits in Arkansas Constitution Amendment 89. Amendment 89 distinguishes particular federally insured institutional loans from other loans and states a 17% annual ceiling for its “other loans” category, with further provisions concerning federal law and consequences. That is not a universal 17% credit-repair-service fee cap.

The applicable institution, transaction, federal rule, interest characterization, and rate must be established before using that ceiling or its consequences. No actual loan-interest calculation or usury determination is made. C033–C034. Arkansas Legislature+2

B3. Separate conditional telephonic-seller registration

A credit-services seller can independently enter Chapter 99 if its sales activity satisfies that chapter. This is not automatic merely because a telephone is used.

The definition addresses specified outbound representations—such as bonuses, prizes, below-regular-price offers, or identity/supplier misrepresentations—and specified inbound responses to unsolicited notifications. It contains separate exclusions for qualifying securities, insurance, publishing, prior-customer, face-to-face, supervised-financial-institution, burial, public-utility, issuer, commodity, and resale transactions. Each has its own activity and status conditions. C095–C096. Justia Law

Where that definition applies and no exclusion is established:

Act 728 of 2017 moved the specified administration to the Secretary of State and expressly became effective January 1, 2018—not its March 28, 2017 approval date. C097–C105, C109. Arkansas Legislature+1

Public forms were read, but conflicts remain

The currently linked Secretary of State files have May 2025 revision identifiers in their filenames. Their actual fields and instructions were inspected:

The registration instructions say email submission; the bond form says mail. These are operational discrepancies to resolve, not permission to guess the accepted filing method. The forms establish what was publicly posted and read, not a named actor’s registration or a universally compliant instrument. C106–C108, C110. Arkansas Secretary of State+4

C. Disclosure, contract, cancellation, and return requirements

C1. State disclosure and contract matrix

The copy-at-cancellation wording appears in both the official enactment and the 2025 reproduction. The repealed provision’s copy-at-signing language cannot silently be treated as the new state clause. Arkansas Legislature+2

C2. Cancellation and refund clocks

C047–C055, C070–C072. Justia Law+3

No actual cancellation deadline is calculated. The worked examples deliberately use nonboundary events.

C3. Prohibited representations and waivers

State § 202(e) prohibits the specified false or misleading creditworthiness statements or advice and deceptive sale practices. It also prohibits the described solely-for-referral charge. Federal § 1679b(a) separately addresses false credit statements and identity-alteration advice intended to conceal accurate, current credit information, as well as deceptive credit-repair sales. No advice to create a new identity or remove accurate information is authorized here. C032, C051–C052.

State waiver attempts violate the subchapter and buyer waivers are void. Federal CROA has both nonwaiver provisions and a separate noncompliant-contract rule. No general state severability result is established from Amendment 89’s own severability clause or from unrelated law. C053–C055. Justia Law+2

C4. Actor and event workflow — 14 rows

D. Necessary federal overlap and limited remedies

D1. The reviewed PASS-02 distinction, freshly confirmed

The bounded PASS-02 premise is preserved: state bond-and-trust language does not create a federal advance-fee exception. The new work here adds the state contract, cancellation, exemption, security, and remedy detail. It does not treat PASS-02 as a completed state dossier.

The attorney exception in paragraph (a)(3) concerns the specified recovery-services provision. It is not an attorney exception to paragraph (a)(2). No proposed 180-day, state-license, or attorney alternative is treated as enacted law. C063–C083. U.S. Code+2

Federal coverage is not universal

CROA requires the actual consideration, interstate-commerce or mail use, and express or implied credit-improvement/advice purpose. Its exclusions separately address qualifying nonprofit organizations, a defined creditor restructuring debt owed to that creditor, and specified depository institutions/credit unions and affiliates or subsidiaries.

The state exclusion for an Arkansas attorney or a state-regulated collection agency does not itself establish a CROA exclusion. Conversely, a federal exclusion does not prove every state exclusion. C063–C067. U.S. Code+1

TSR coverage requires the actual telemarketing and jurisdictional predicates. The rule includes a qualifying face-to-face branch and a truly unsolicited inbound branch, but the general advertisement/direct-mail inbound exemptions do not broadly exempt the listed credit-repair offers. Third-party telemarketer treatment and nonprofit or institutional jurisdiction must be independently established. C076, C082–C083. eCFR

D2. Limited remedy matrix

The ADTPA also contains applicability exclusions. Air Evac adopted a specific-conduct, not merely regulated-business, approach to the provision it construed. Full interaction of § 202(h), federal-compliance language, and each ADTPA exclusion remains fact-dependent. C056–C062, C073–C075, C087. Justia Law+3

Repealed versus current remedies

Act 944 repealed the former § 4-91-105, which had its own damages, fee, and punitive-damages language. That old section cannot be cited as the current state CSO remedy. Federal § 1679g is a separate current statute and has its own predicates. C061, C073.

The 2017 ADTPA amendment also changed private-action requirements and includes a statutory class-action limitation with an Amendment 89 exception. Its interaction with federal procedure and other law is outside this limited gateway; no actual class-action ruling is made. C057–C058. Arkansas Legislature+1

D3. Published construction actually read

A bounded search did not produce a responsive published Arkansas or Eighth Circuit majority resolving the 2017 statute’s unusual buyer definition, trust mechanics, copy-at-cancellation wording, or full cancellation/refund integration. That is not proof that no such authority exists. No complete citator clearance is claimed. C084–C088, C094. GovInfo+2

E. Four worked examples

All facts, entities, dates, prices, payments, premiums, collateral, and performance events are fictional. They illustrate conditional rules and accounting only. All dollar inputs are exact to cents; no rounding issue arises. No actual contract or permissible fee is determined.

Model 1 / P01 — State-only timing versus covered federal no-advance

Assumed state-only branch

Assume:

• An existing consumer borrower buys substantive assistance obtaining a new household loan.
• The actual service is not represented, expressly or implicitly, as improving credit history or rating.
• No covered telemarketing program is used.
• The provider is covered by state § 202 and no exclusion applies.
• The service is not merely referral to generally available terms.
• Required state disclosures and contract conditions are satisfied.
• A qualifying $10,000 bond and insured Arkansas trust account are established.
• Price is $600; a $150 advance is received and left unapplied.

The state security condition potentially removes that one state complete-performance prohibition. It does not establish compliance with lending, interest, referral, contract, or other law.

150−0−0=150150-0-0=\boxed{150}150−0−0=150​Assume a private surety premium of $240, paid from provider money. That is a stipulated business expense—not the statutory price of the bond and not a consumer charge. The $10,000 penal sum is not a $10,000 expense or client deposit.

Covered federal branch

Change the facts: the provider uses interstate communications to sell the service as improving the consumer’s credit. CROA applies and no exclusion is established.

Before the agreed service is fully performed, the $150 cannot be charged or received under § 1679b(b), regardless of state security. If it was nevertheless received and then fully returned:

150 receipt−150 return−0 application=0150\text{ receipt}-150\text{ return}-0\text{ application}=\boxed{0}150 receipt−150 return−0 application=0​The return does not automatically eliminate every possible prior violation or remedy. C022–C030, C063–C068, C093.

Model 2 / P02 — Partial performance, completion, contractual refund, and TSR timing

Assume a single $800 credit-repair service promises four deliverables. CROA applies; any initial no-service period has ended. No state advance exception is assumed.

Completing three of four deliverables does not establish:

$800×34=$600$800\times \frac{3}{4}=$600$800×43​=$600as a legally earned or collectible amount. The arithmetic is valid; the assumed legal divisibility is not established.

Later, assume all agreed service is fully performed, no TSR coverage exists, no cancellation or defect prevents payment, and all other applicable conditions are satisfied:

800 received−800 applied=0 unapplied800\text{ received}-800\text{ applied}=0\text{ unapplied}800 received−800 applied=0 unappliedAssume a genuine contractual promise later requires a 25% refund on a specified event. This percentage is fictional, not a statutory rate:

800×25%=$200800\times25%=$200800×25%=$200800−200=$600 retained800-200=\boxed{$600\text{ retained}}800−200=$600 retained​No creditor receives this service payment, so creditor principal remains unchanged.

TSR branch: both event orders can satisfy the sequencing requirement

Assume promised results occurred February 10, 2026.

The six-calendar-month anniversary is August 10, 2026. A report issued August 20 is more than six months afterward.

Both branches place both required events before the request, assuming the report demonstrates the promised results and all other predicates are satisfied.

A report issued August 1, before the six-month anniversary, does not become qualifying merely because the seller waits until October to send it or request money. No 180-day conversion is used. C068, C077–C081.

Model 3 / P03 — Cancellation, receipt, and return

Assume the transaction and signing occur Tuesday, October 6, 2026. A signed written cancellation is delivered to and received by the seller on Wednesday, October 7.

This deliberately avoids the contested outer boundary of either five-day state wording or three-business-day federal wording.

Assume the buyer paid $300 under the state-covered contract. The provider claims it incurred $75 of internal work costs.

The prescribed state cancellation notice promises return of payments under the contract, not payment minus an automatically authorized work-cost deduction:

300 received−300 returned=0300\text{ received}-300\text{ returned}=\boxed{0}300 received−300 returned=0​Assume the full $300 is returned on Tuesday, October 13—six elapsed calendar days after receipt. The example does not purport to calculate the last permissible day or resolve every holiday/business-day rule.

Adverse branches: If CROA applied and the $300 was an impermissible advance, returning it does not retroactively authorize the charge. If notice is first sent near an outer deadline, dispatch, delivery, signing, transaction, and receipt facts require separate legal analysis. C044–C050, C068–C072.

Model 4 / P04 — Mixed services, full-contract cancellation, and separate security accounting

Assume a seller labels a package:

• Monitoring/education: $150.
• Repair: $550.
• Total received: $700.

Branch A: one integrated covered contract

Assume timely cancellation applies to the whole contract:

700−700 return−0 retained=0700-700\text{ return}-0\text{ retained}=\boxed{0}700−700 return−0 retained=0​Line-item pricing alone does not establish a right to retain $150.

Branch B: legally independent service established

Only for arithmetic, assume competent legal determination establishes:

• A genuinely separate, lawful, completed $150 service;
• Its payment is not barred by applicable law;
• The $550 contract alone is validly canceled;
• No other refund or invalidity rule requires return of the $150.

Then:

700−550 return−150 lawful application=0 unapplied700-550\text{ return}-150\text{ lawful application}=\boxed{0\text{ unapplied}}700−550 return−150 lawful application=0 unapplied​The legal independence is an assumption, not a finding supplied by this model.

Provider security ledger—separate from customer money

Assume the provider begins with $2,500 of its own money:

• Stipulated private premium: $250.
• Stipulated refundable surety collateral: $1,000.

2,500−250−1,000=$1,250 unrestricted provider cash2{,}500-250-1{,}000=\boxed{$1{,}250\text{ unrestricted provider cash}}2,500−250−1,000=$1,250 unrestricted provider cash​The $1,000 collateral is separately held; the $10,000 bond penal sum is not an additional cash outflow. No bond award is assumed.

Creditor ledger—also separate

Assume the consumer independently pays a creditor $200 on $5,000 principal, with no interest or other adjustment in this example:

5,000−200=$4,8005{,}000-200=\boxed{$4{,}800}5,000−200=$4,800​The provider’s $700 receipt, refund, or retention does not reduce creditor principal. C025–C030, C050, C055, C093, C108.

Twelve additional fictional postures

F. Complete source register

Reading conventions

Unless expressly marked otherwise, each source was freshly accessed or attempted October 27, 2026. Exact opening times are unknown.

• P: official primary body.
• R: primary legal text or opinion reproduced by a nonofficial host.
• M: secondary codification.
• G: guidance, form, or index.
• F: failed or incomplete access.

Multiple sections in one act are not independent corroboration. The 2025 Code mirrors are not official October 2026 authentication. A filename revision, page update, publication date, approval date, and commencement date are different facts.

F1. Arkansas core and remedy authorities

F2. Federal statutes and rules

The OLRC pages below displayed laws through Public Law119-124, October15,2026. CROA pages retain the statutory effective-date note for contracts after the six-month period beginning September30,1996; older-contract application is not decided here.

F3. Published decisions and failed historical routes

F4. Conditional telephonic-seller overlap

G. Atomic claim register

Confidence convention: “Verified” means the specified text, enactment, or holding was read. It does not certify all later law or actual applicability. “Partial” identifies a currentness or factual dependency. “Held” means unresolved, not nonexistent.

G1. Classification and exclusions

G2. Security, payment, and interest

G3. Disclosure, contract, cancellation, and nonwaiver

G4. Remedies and federal overlap

G5. Construction, currentness, and conditional registration

H. Granular coverage and exact remaining work

H1. Core requested issues — 32 rows

H2. Currentness and failed-source coverage — 9 rows

H3. Worked-model coverage — 4 rows

H4. Territorial, local, and actual-record holds — 6 rows

H5. Deferred families — 9 rows

H6. Preserved scope crosswalk — 2 rows

I. Researcher self-check

Freshly read: the official 2017 credit-repair enactment and material repeals; selected interest, ADTPA, and telephonic-seller enactments; the relevant 2025 Code reproductions; current displayed CROA and TSR provisions and necessary definitions; four published judicial bodies; and actual public telephonic-seller forms.

Not established: a complete October 2026 official Arkansas Code chain, exact Act944 commencement, a credit-repair-specific accepted bond/trust instrument, complete state counting/electronic-contract harmonization, every incorporated historical definition, complete current citator treatment, or any actual actor/consumer/contract/account facts.

The remaining material holds are not merely administrative details: the state’s buyer definition, copy-at-cancellation wording, state/federal notice integration, trust-operation and claim mechanics, mixed-service divisibility, and actual exemption predicates can change the result.

Register counts: 56 source/access records; 112 numbered claims; 4 judicial-authority entries; 4 worked examples plus 12 additional fictional postures; 14 workflow rows; 32 core-coverage rows; 9 currentness/failure rows; 4 model rows; 6 territorial/actual-record rows; 9 deferred-family rows; and 2 scope-crosswalk rows. These categories are not summed as independently accepted legal propositions.

No independent review, unseen model setting, local write, actual permission, compliant-form adoption, filing, publication readiness, or full-state/parent acceptance is claimed.

END S_AR PASS-08.