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

S_OH PASS-01 — Ohio provider market access and consumer fees

Ohio’s current Debt Adjusters Act establishes a compliance regime, not a general debt-adjuster licensing system. Its definition can reach principal-reduction settlement, noncustodial negotiation, concession-based debt management, and collection-and-distribution services. The verified consumer fee provisions are $75 for an initial consultation or initial plan setup, $100 per calendar year for consultations, and a periodic administration ceiling equal to the greater of 8.5% of the specified monthly distribution base or $30. These provisions do not establish a verified percentage-of-savings settlement-fee pathway or authorize collection before independently applicable performance requirements are met. [C001–C006, C018–C026; S001] Ohio Laws+2

Baseline: October 22, 2026, Pacific. Actual access/check date: October 23, 2026, UTC, still October 22, 2026, Pacific. Source-specific legal effective dates appear below.

This is one component of the Ohio investigation. It does not establish a named provider’s authorization, complete the Ohio dossier, or imply state or A066 acceptance.

Reference convention: In the discussion, S001 means S_OH-P1-S001, and C001 means S_OH-P1-C001. The complete identifiers appear in the source and claim tables.

A. Substantive findings

1. Classification follows the activity and representations

Ohio Revised Code §4710.01(B) supplies two independent routes into “debt adjusting”: services intended to adjust, compromise, or discharge indebtedness; and receiving debtor funds or other value for disbursement to creditors. Holding oneself out as providing the specified debt-management services also matters. Custody is therefore not a prerequisite to the negotiation route. [C001–C003; S001 §4710.01(A)–(B)]

These are applications of the statutory language, not determinations about an unseen SettleADebt.com service agreement or sales script. Ohio Laws

Consumer versus business purpose. Chapter 4710 does not express a personal, family, or household-purpose restriction or a blanket business-debt exclusion. Business-debt work therefore cannot be discarded from the classification analysis. However, applying the resident-specific fee provisions to an entity debtor remains a narrower unresolved issue: §4710.01(C) defines residence using temporary or permanent living in a place. I have not established an authoritative application of that wording to corporate residence. [C004; S001 §4710.01]

Ohio residents and remote providers. The fee provisions expressly protect debtors residing in Ohio, and residence includes temporary residence. They do not condition that protection on the provider maintaining an Ohio office. An out-of-state office is therefore not a facial fee-cap exemption. Complete personal-jurisdiction, choice-of-law, and interstate enforcement analysis remains a later investigation. [C005; S001 §§4710.01(C), 4710.02(B)–(C)]

2. Market access: compliance, actual exemptions, and a separate registration regime

Chapter 4710 does not issue a general debt-adjuster license

The current chapter contains definitions, duties, exclusions, enforcement, and penalties. It does not establish an ordinary debt-adjuster license or registration certificate. Nor does it categorically prohibit every for-profit debt adjuster. The legal route is compliance with the chapter, any applicable exclusion, and other independently applicable law. [C006; S001, entire chapter]

Material entry and continuing conditions include the annual independent CPA audit and filing with the Attorney General’s Consumer Protection Division, mandatory specified insurance, and applicable funds-handling duties. The insurance provision includes a $100,000 minimum; its full calculation and implementation belong in the later funds/insurance pass. Noncustodial operation does not create an express exception to the audit or insurance language. [C006, C035; S001 §4710.02(A), (D)–(F)]

Chapter 4710 exclusions are specific

An exclusion from Chapter 4710 is not a grant of permission under every other applicable law. [C007–C011; S001 §4710.03; S002 §1321.51(B)–(C); S003 §1322.01(U), (GG)–(HH)] Ohio Laws+3

Unauthorized practice of law is an activity boundary

In Ohio State Bar Assn. v. Watkins Global Network, L.L.C., 2020-Ohio-169, the Ohio Supreme Court rejected a per se rule that every nonlawyer debt negotiation constitutes practicing law. The inquiry concerns the actual conduct: legal advice, legal documents, legal defenses, and comparable legal services can cross the boundary. The court found one violation involving legal advice and tactics in a foreclosure matter, while entering judgment for the respondents on the other 30 allegations. [C012; S007 ¶¶9–18, 25–26]

The underlying clients were businesses. The decision resolves the stated unauthorized-practice issue; it does not approve a particular Chapter 4710 fee, consumer agreement, or settlement program. supremecourt.ohio.gov

For an out-of-state lawyer, current Professional Conduct Rule 5.5 supplies additional conditions. Association with an Ohio lawyer under the temporary-practice provision requires active participation; another temporary-practice route requires the specified relationship to the lawyer’s authorized practice elsewhere. Remote-work authorization does not generally authorize soliciting and accepting Ohio representations. Advisory Opinion 2011-2 illustrates why Internet acquisition of Ohio clients, without the required connections, cannot simply be treated as temporary practice. [C013; S008 Rule 5.5(c)(1), (c)(4), (d)(4); S009 pp.1, 6–8]

Chapter 4712 can independently apply

The Credit Services Organization Act is a separate classification question. Paid promises or services involving credit improvement, obtaining credit from others, and related assistance can trigger it. Its definition of an extension of credit includes qualifying deferral of existing debt. Consequently, a business cannot assume that calling its product “settlement” excludes Chapter 4712. Nor does this pass conclude that every settlement service necessarily satisfies that definition. [C014; S004 §4712.01(A), (C)(1), (D)] Ohio Laws

Important exclusions have their own conditions:

• The budget-and-debt-counseling exclusion requires the service described in §2716.03(D), 501(c)(3) status, and compliance with Chapter 4710.
• The attorney exclusion requires an Ohio-admitted attorney providing a privileged legal service; it expressly excludes the listed credit-obtaining and identification-alteration services.
• Other institutional exclusions include specified lenders, banks and affiliates, credit unions, mortgage businesses, government entities, and other enumerated entities. Their statutory qualifications and activity limits must be satisfied.
• The person claiming an exemption bears the statutory burden under §4712.10(D).

[C015; S004 §4712.01(C)(2), §4712.10(D); S005 §2716.03(D)(1)]

If Chapter 4712 applies and no exclusion does, the organization must apply to and receive a certificate from the Ohio Division of Financial Institutions before conducting business. Advertising before registration is also prohibited. The statute requires a customer-contract copy and evidence of the required $50,000 bond, among other application information; a nonresident organization needs an Ohio statutory agent. Application and renewal fees are each $100 payable to the regulator, not consumer price allowances. [C016; S004 §§4712.02(A), (C), (E), (H), (K), 4712.06(A), 4712.07(F)] Ohio Laws+2

Registration cannot cure a statutory prohibition. Section 4712.071 prohibits the covered CSO services in connection with an extension of credit satisfying any of these conditions:

• Amount below $5,000;
• Repayment term of one year or less; or
• APR above 28%.

These are conditions concerning the extension of credit, not a general minimum enrolled-debt balance for all settlement services. [C017; S004 §4712.071(A)–(C)] Ohio Laws

3. Current fee structures and the limits of what was established

Verified Chapter 4710 provisions

Section 4710.02 remains displayed as effective March 29, 2007. Its operative text supplies the following figures; no indexing clause or adjustment delegation was found in the current chapter. [C018–C023; S001 §4710.02]

[C018–C022; S001 §4710.02(A)(3)–(4), (B)(1)–(3), (C)] Ohio Laws

For a bounded example involving one monthly administration charge, the calculation is:

Periodic ceiling = greater of (0.085 × monthly amount designated for creditor distribution) or $30.

The statute does not use enrolled principal or savings as that base. This pass does not resolve gross-versus-net allocation when a single debit combines creditor funds and fees, authorize repeated weekly charges against the monthly denominator, or establish a statutory rounding rule. [C021, C025]

Success fees and other unlisted charges remain held

I did not establish current Ohio authority approving a stand-alone percentage-of-savings, percentage-of-enrolled-principal, or per-debt success-fee schedule for a nonexempt Chapter 4710 provider.

The operative chapter does not expressly supply such a schedule, a general lifetime settlement-fee cap, or a comprehensive cancellation-proration formula. That absence is not proof that an unlisted charge is unlimited or lawful. Conversely, the text alone does not resolve every possible nonperiodic post-performance charge. The classification of the charge under §4710.02(A)(3) and (B), together with authoritative interpretation, remains necessary. [C024–C025; S001 §4710.02]

Historical figures must not be imported

The official Legislative Service Commission analysis of Am. H.B. 367, 127th General Assembly, as passed by the House, places a 20% aggregate principal-based cap and a 50% refund provision with exclusions and conditions in its proposed-change column. Those provisions are not in current Chapter 4710. The analysis is evidence of that historical proposal, not present fee permission. [C038; S015 pp.5–6] h0367-ph-127.doc

The official pages retrieved for 136th General Assembly H.B. 534 and S.B. 256 showed introduced/pending legislation proposing replacement of Chapter 4710, not an enacted replacement. Their proposed licensing or fee provisions were not applied as current law. [C037; S013–S014] Ohio House of Representatives+2

Exempt legal practice and separate CSO services

For qualifying legal practice, the Chapter 4710 exclusion does not produce unlimited attorney fees. Current Professional Conduct Rule 1.5 prohibits illegal or clearly excessive fees and imposes requirements for contingent-fee agreements. Rules 1.5(d)(3) and 1.16(e) address fee labels and unearned advances. No statewide numerical debt-settlement attorney-fee cap was established here. [C030; S008]

Chapter 4712’s $100 application/renewal fees are regulatory charges, not a consumer fee schedule. No general numerical consumer-price allowance was established from that chapter; its performance and cancellation restrictions remain independently important. [C016, C028–C029; S004]

4. When fees may be requested or received

State rules

Chapter 4710’s numerical limits do not, by themselves, establish when a particular payment becomes earned or collectible. The statute’s initial-fee category cannot override another applicable advance-fee restriction. Its 30-day creditor-disbursement rule—and the debtor-instruction exception to that rule—does not waive the fee provisions. [C026; S001 §4710.02(A)–(B)]

For a covered CSO, §4712.07(A) prohibits charging or receiving consideration before completion of the agreed services within the applicable performance period. Section 4712.07(B) also prohibits charging for the specified referral unless credit is actually extended as a result. [C028; S004 §4712.07(A)–(B)]

Section 4712.05 ordinarily limits the service period to 60 days or a shorter period prescribed by the superintendent. Its conditional 12-month route is confined to specified ongoing credit-related services and requires post-performance periodic payments, cancellation without future-service liability, documented renewal assent, and the other listed conditions. It is not a general monthly settlement-fee exception. The statute also provides the three-business-day cancellation right. [C029; S004 §4712.05(A)(1), (A)(3)(a)–(e), (B)] Ohio Laws+1

No universal Chapter 4710 cancellation-refund formula was verified. That does not make every paid amount nonrefundable. For an applicable consumer transaction, Ohio Administrative Code 109:4-3-09(A)(2) addresses payment followed by eight weeks without delivery, refund, the prescribed delay/refund offer, or an agreed qualifying substitute. Its applicability and alternatives must be considered; it is not a universal percentage refund rule. [C027; S016] Ohio Laws

Federal TSR: common context, separately applied

The exact operative provisions were read. The TSR’s debt-relief definition includes qualifying services concerning unsecured debt, including concessions beyond principal reduction. Telemarketing coverage and exemptions require their own factual analysis. Advertising-generated inbound debt-relief calls are not automatically exempt; business-to-business and qualifying face-to-face situations require separate treatment. FTC guidance also explains that there is no blanket attorney exemption and that genuine nonprofit status is a jurisdictional question, not something established by a label. [C031; S010 §§310.2(o), (ii), 310.6(b); S011]

When §310.4(a)(5) applies, requesting or receiving a debt-relief fee requires:

1. At least one debt has been renegotiated, settled, reduced, or otherwise altered under a valid agreement executed by the customer.
2. The customer has made at least one payment under that agreement with the creditor or collector.
3. For individually resolved debts, the fee satisfies the prescribed proportional-debt method or uniform percentage-of-savings method.

[C032–C033; S010 §310.4(a)(5)(i)(A)–(C)] ecfr.gov

These federal allocation methods do not establish an Ohio-approved fee amount.

The dedicated-account provision is conditional: insured institution; consumer ownership and interest; independent account administrator; no prohibited referral compensation; and withdrawal without penalty with the required funds returned within seven business days. Depositing money into such an account is not equivalent to the provider earning it. [C034; S010 §310.4(a)(5)(ii)(A)–(E)]

For telemarketed credit-repair promises, §310.4(a)(2) supplies a different restriction involving expiration of the promised performance period and a qualifying consumer report issued more than six months after the results. A debt-settlement first-payment event does not replace that provision. [C040; S010 §310.4(a)(2)]

5. What public market-access evidence was actually verified

[C016, C035–C036, C039; S001, S004, S006, S017–S020]

The operational failures were substantive gaps, not successful verification:

• The Attorney General debt-adjuster business-guide route was rejected.
• The Attorney General CSO business-guide route was rejected.
• The DFI applications-and-forms route returned 404.
• The NMLS Ohio CSO checklist route redirected to a general resource page without furnishing the current checklist.

The exact failed routes and next actions are preserved below. No marketing statement was used as provider authorization.

6–7. Examples, coverage, and remaining investigations

The worked examples in D.1 distinguish a mathematical ceiling from a lawful, earned charge. The coverage table in D.2 preserves the unresolved fee classifications and operational evidence, together with the later required Ohio passes.

B. Source table

Access key A: Actually checked October 23, 2026 UTC / October 22, 2026 Pacific. “Read” means operative text or the specifically identified passages were retrieved and examined. “Failed” and “discovery only” are not substantive evidence of permission.

Controlling and interpretive materials

Procedure, legislative status, historical comparison, and failed routes

C. Claim table

Confidence terminology: Text = directly established by the identified current provision; Application = a bounded interpretation of that text or holding; Hold = not established sufficiently to approve the proposition. Currentness is subject to the source-version limits above.

D. Worked examples and coverage/gaps

D.1. Plain-text worked examples

Common assumptions: All money is U.S. dollars. Unless a hold is stated, the consumer is an Ohio resident, the provider is nonexempt, the identified service is actually performed, charges are reasonable, the hardship policy is implemented, and all independently applicable timing requirements are satisfied. Examples using the periodic formula assume one monthly administration charge and a creditor-distribution amount identified separately from the fee. Arithmetic is exact to cents unless stated otherwise. These examples do not verify any provider.

Example 1 — Initial consultation plus later consultation in the same calendar year

Inputs: An initial consultation fee of $75 has already been lawfully charged. A later consultation is priced at $35.

Base: $100 annual consultation ceiling.

Operation: $100 − $75 = $25 remaining.

Check: $75 + $35 = $110, which exceeds the annual limit by $10.

Result: The later consultation can consume no more than the remaining $25, subject to the other legal conditions. This does not decide how a separately classified setup charge affects that annual consultation cap. [C019–C020]

Example 2 — Lower monthly distribution

Input: $200 designated for distribution to creditors.

Percentage calculation: $200 × 0.085 = $17.

Comparison: Greater of $17 and $30 = $30.

Result: $30 is the numerical ceiling for the modeled periodic charge. It is not a compulsory fee, and hardship or reasonableness can require less. [C018, C021]

Example 3 — Higher distribution and conservative cent treatment

First input: $500 for creditor distribution.

Calculation: $500 × 0.085 = $42.50; greater of $42.50 and $30 = $42.50.

If separately collected, modeled total outlay is $500 + $42.50 = $542.50.

Second input: $400.01 for creditor distribution.

Calculation: $400.01 × 0.085 = $34.00085.

Conservative cent result: $34.00, obtained by rounding downward. A $34.01 charge would exceed the calculated percentage ceiling.

The downward rounding is an example-design choice; no statutory rounding convention was established. [C021, C025]

Example 4 — Prior collection does not create another allowance

Inputs: The single modeled monthly charge has a $30 ceiling. The provider already collected $20 toward that same charge.

Operation: $30 − $20 = $10 remaining.

Result: At most $10 remains within that modeled charge’s ceiling. This does not authorize a second administration charge or resolve repeated weekly billing. [C021, C025]

Example 5 — State arithmetic does not make an advance fee collectible

Inputs: $0 distributed; a $1,000 debt has an executed agreement to settle for $600; the customer has made no payment under it; TSR coverage is assumed.

State arithmetic alone: Greater of ($0 × 0.085) and $30 = $30.

Federal timing check: Required customer payment = absent.

Result: $0 may yet be requested or received as the covered debt-relief fee. The state calculation does not satisfy the missing federal trigger. [C026, C032]

Example 6 — Partial settlement and a proposed savings fee: hold

Inputs: Two enrolled debts of $2,000 and $8,000, totaling $10,000. The first is settled and paid for $1,000. Proposed charge: 25% of savings.

Savings base: $2,000 − $1,000 = $1,000.

Proposed calculation: $1,000 × 0.25 = $250.

Result: HOLD the $250 Ohio fee authorization. This pass did not establish the state-law pathway for that stand-alone success fee.

For the alternative federal proportional method, if an otherwise lawful total fee were F dollars, the first debt’s share would be $2,000 ÷ $10,000 × F = 0.20F dollars. That illustrates allocation only; it neither supplies a lawful F nor approves the proposed $250. [C024, C032–C033]

Example 7 — Dedicated-account cancellation before any fee is earned

Inputs: $900 remains in a qualifying dedicated account. Properly earned provider fees are $0. Consumer requests withdrawal.

Operation: $900 − $0 = $900.

Result: The required account return is $900 within seven business days, without a withdrawal penalty under the federal condition. The historical proposed Ohio 50% refund provision is not used. [C034, C038]

Example 8 — Registration does not cure the CSO credit prohibition

Inputs: A nonexempt CSO proposes a service connected with a $4,000 extension of credit, a 24-month term, and 12% APR.

Tests: $4,000 < $5,000 is true; 24 months ≤ one year is false; 12% > 28% is false.

Operator: The statutory conditions are alternatives—any one suffices.

Result: The service is prohibited under §4712.071 despite the favorable term and APR. No lawful consumer fee is calculated. A $5,000 extension with a 12-month repayment term would separately trigger the term prohibition. [C017]

Example 9 — Unearned attorney advance on withdrawal

Assumptions: Actual qualifying legal representation, a lawfully received advance, and withdrawal triggering Rule 1.16(e).

Inputs: $600 advance; $240 actually earned.

Operation: $600 − $240 = $360 unearned.

Result: $360 must be promptly refunded under the cited withdrawal rule. The example does not establish that $240 is reasonable, validate an advance under the TSR, or supply a numerical attorney-fee cap. [C030]

Example 10 — Quoted NSF charge without a verified numerical safe harbor

Input: Provider proposes a $25 insufficient-funds transaction fee.

Available rule: The additional charge must be reasonable; no exact dollar maximum was established.

Result: HOLD approval of $25 pending facts establishing a genuine insufficient-funds transaction and reasonableness. It cannot be approved merely because the statute allows some reasonable NSF fee. [C022]

D.2. Component coverage and exact next investigations

“Answered” means answered at the legal-rule level identified here. It does not mean a provider’s implementation has passed review.

E. Researcher self-check

Actually read: Current Chapter 4710; the identified current Chapter 4712 sections and cross-referenced definitions; the full operative text of the two OAC rules used; the relevant Watkins majority analysis and disposition; the specified current professional-conduct rules; relevant passages of Advisory Opinion 2011-2; the exact federal TSR definitions, fee provisions, and exemptions used; official legislative summary/status material; and the actual historical H.B. 367 comparison document.

Not represented as read or verified: The blocked AG business guides, a current DFI application package, a current Ohio NMLS CSO checklist, an operational provider lookup, any named provider’s certificate or audit record, the entire lengthy federal adoption preamble, or an exhaustive subsequent-case citator. Search snippets and old checklist references were discovery only.

Currentness controls: Statutory effective dates were kept separate from webpage updates. Pending bills and a historical House-passed proposal were not treated as enacted law. The federal compilation’s displayed through-date was preserved. No indexed amount was invented.

Method: Ordinary chat research with direct public-source browsing and parallel internal research tracks; no Deep Research or separate chatgpt.com conversations are claimed. No verified model-selector change is claimed. No application, contact, purchase, account change, or publication was undertaken.

The verified result is a substantive Ohio market-access and fee component with explicit holds on the remaining success-fee interpretations, operational application/lookup evidence, and provider-specific status.

END S_OH PASS-01