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

S_SC PASS-03 — South Carolina consumer agreements and client-money duties

SettleADebt.com extensive state investigation — South Carolina Current-source check: October 24, 2026, Pacific Actual research/access date: October 24, 2026, Pacific

This is a focused contract/client-money component only. It does not complete South Carolina, does not establish that SettleADebt.com or any provider is authorized, and does not convert unresolved PASS-01/PASS-02 issues into settled law.

Executive result

South Carolina draws a consequential line between a compensated noncustodial negotiation service and a custodial/control-based debt management plan.

A compensated provider negotiating reductions of obligations can be within Chapter 7 even when it never takes possession of settlement money. Such a provider is subject to the Act's general pre-service education/budget-analysis and written-contract requirements if no exemption applies. But the additional statutory provisions concerning schedules of money sent to the organization for creditor distribution, participating/nonparticipating creditor lists, and the §37-7-111 trust-account regime are directed to the DMP/funds-distribution model. DCA's own current counseling checklist expressly separates the general contract requirements from the additional provisions applicable when the organization receives consumer money for creditor disbursement. South Carolina Legislature+1

For money actually paid to the licensee for creditor distribution, South Carolina imposes a substantial custody regime: a trust account for debtors' benefit, debtor-by-debtor account records, deposit within one business day, creditor disbursement within five business days, continuous segregation, monthly reconciliation, quarterly accounting, and a consumer accounting within seven days after written demand, subject to a frequency limit. South Carolina Legislature

The cancellation right is not a conventional three-day cooling-off period. The required contract disclosure says the consumer may cancel at any time and for any reason, without penalty or obligation, by giving 10 days' written notice; §37-7-110(D) separately requires cancellation of a DMP upon the consumer's request with at least ten days' notice and refund of all unexpended funds. South Carolina Chapter 7 does not supply a counting rule in the provisions reviewed that safely converts “10 days” into a specific calendar endpoint, so this pass does not invent one. South Carolina Legislature

A. Substantive answers

A1. Mandatory agreements for negotiation versus DMP/credit-counseling models

A1.1 Coverage necessary to apply the agreement duties

South Carolina's statutory definition of credit-counseling services includes three distinct types of conduct: receiving or offering to receive consumer money for creditor distribution; improving or offering to improve credit; and negotiating or offering to negotiate deferral or reduction of obligations concerning credit extended by others. A “debt management plan” is narrower: it involves settlement/pooling/distribution and the consumer giving the organization money or control of funds for distribution to creditors. “Debt settlement” includes forgiveness of principal or reduction in payments, charges, or fees. S_SC-P3-C001–C002. South Carolina Legislature

Accordingly:

• Noncustodial settlement/negotiation: Chapter 7 can apply even if the consumer keeps settlement money and pays creditors directly.
• Custodial/control DMP: additional duties attach where the consumer gives the organization money or control of funds for creditor distribution.
• Calling a product “debt settlement,” “credit counseling,” “legal services,” or a “special-purpose account” does not itself decide which branch applies. Actual services and control matter. C002.

The Act's geographic nexus is broad enough to reach an organization that solicits or contracts with South Carolina debtors even without a South Carolina office. C003. South Carolina Legislature

Chapter 7's exclusions remain conditional. Among others, it lists South Carolina-authorized attorneys acting in the regular course of their profession, specified financial institutions, CPAs in an accounting practice, certain court actors, nonprofit faith-based organizations, and other enumerated categories. Nothing in this pass treats a generic nonprofit label, attorney affiliation, or bank relationship as sufficient. C004. South Carolina Legislature

A1.2 Pre-contract prerequisites

Before covered credit-counseling services or a DMP are undertaken, §37-7-108 requires:

1. the statutory credit-education program;
2. a written, thorough budget analysis;
3. delivery of a copy of that budget analysis to the debtor;
4. a determination that the proposed program is suitable and that the debtor can reasonably meet the budget; and
5. a separate written disclosure that the consumer may keep, displayed clearly and conspicuously and containing nothing else.

The required disclosure warns that the services may not be suitable for all consumers and that alternatives, including bankruptcy, may be available. It also contains a secured-debt limitation/warning unless such services are offered. C005. South Carolina Legislature

The budget analysis itself is prescriptive. It includes income, deductions, housing and living expenses, garnishments/judgments, creditors reasonably expected to participate and not participate, and the amount available for the DMP. South Carolina Legislature

DCA's 2010 Administrative Interpretation 7.108-1001 further interprets the budget-analysis process as work that must be performed/completed by properly licensed counselors in the circumstances addressed there; it rejected use of unlicensed counselors to gather the statutory §108(2)(a)–(m) information while awaiting licensure. That is an agency interpretation, not a statute or judicial holding. C006. Consumer Affairs+1

A1.3 Written contract and execution

Section 37-7-110(A) provides that a credit-counseling service requiring payment, a fee, or other consideration may not be supplied unless there is a written and dated contract, compliant with subsections (B) and (C), signed by the consumer. The statute expressly says this section does not apply to the §37-7-109(A) setup fee. The precise interaction between that exception and the regulation's fee-in-contract rule remains an earlier-pass unresolved issue and is not resolved in PASS-03. C007. South Carolina Legislature

DCA's 2010 Interpretation 7.108-1003 independently confirms the agency's construction that the education program, budget analysis, and compliant written contract precede compensated covered counseling services. It also addresses assignments of existing contracts. Again, this is an agency administrative interpretation, not controlling statutory text or a judicial holding. C008. Consumer Affairs+1

A1.4 General mandatory contract provisions

The contract must include, among other things:

• consumer and licensee names, addresses, and telephone numbers;
• a reasonable estimate of all payments and fees the consumer will make to the organization during the contract, including a maximum;
• a full and detailed description of services;
• all guarantees;
• an estimated completion date or performance period, which cannot exceed five years from the original contract;
• the statutory cancellation statement;
• required disclosures concerning possible creditor compensation;
• the restriction on required ancillary products/services in the DMP context;
• the prohibition on mandatory “voluntary contributions”; and
• Department contact information. C009. South Carolina Legislature+1

This pass does not recalculate or reassess the fee ceilings from PASS-01. The contract must disclose whatever fees are lawfully applicable, but contract disclosure cannot itself create a fee otherwise unauthorized by law.

A1.5 Additional DMP / creditor-distribution terms

Where the arrangement involves funds being sent to the organization for creditor distribution, additional terms include:

• a schedule of payments to be made by the consumer to the organization for creditor distribution, including amount and due date;
• late/default terms;
• creditors expected to participate;
• a good-faith belief at contract execution that the identified creditors will participate;
• notice to the consumer of changes in creditor acceptance within two business days after learning of the change;
• for each participating creditor, the debt amount, payment amount, payment date, and anticipated payoff date;
• identification of creditors not expected to participate. C010. South Carolina Legislature

DCA's current foreclosure/housing counseling compliance checklist is particularly useful here because it divides contract requirements into general requirements and additional terms “if receiving consumer money for disbursement to creditors.” That operational guidance supports—not replaces—the textual distinction between ordinary compensated negotiation and a custodial DMP. C011. Consumer Affairs

A1.6 Creditor consent records

For a DMP, §37-7-109 requires a separate creditor-consent record maintained in the debtor file. It must identify all creditors and document how and when consent was sought, whom the provider contacted where available, responses, special/revised conditions, and when required consent was secured. The statute permits seeking consent by telephone, fax, electronic mail, or first-class mail. It establishes statutory presumptions after specified periods when a creditor does not respond or when it accepts a DMP payment. C012. South Carolina Legislature

DCA's currently posted FAQ goes further procedurally: it says the creditor-consent form itself must be on paper and kept in the client's paper file; if the underlying information is held electronically, a compliant table should be printed and placed in that file. That is agency operational guidance rather than the enacted text and should not be elevated to a statutory electronic-record prohibition. C013. Consumer Affairs

A1.7 Contract copy and delivery

The Act explicitly requires delivery to the consumer of:

• a copy of the written budget analysis; and
• the separate §37-7-108(3) disclosure in a form the consumer may keep.

By contrast, in the Chapter 7 provisions and R.28-700 passages actually reviewed in this pass, I did not locate an express clause saying, in those words, that the organization must deliver a copy of the fully executed §37-7-110 contract to the consumer. The regulation requires the organization to retain documents signed by and/or given to the consumer, expressly including the budget analysis and contract, but that retention rule does not itself create a new delivery command. C014. South Carolina Legislature+1

Therefore:

HOLD: do not assert either that no executed-copy duty exists under all South Carolina law or that email/hand delivery of an executed copy is mandatory under Chapter 7 until any generally applicable contract/e-commerce law or later DCA authority addressing that point is checked.

A1.8 Readability, completeness, and prohibited terms

No general font-size, grade-level, or plain-language formula was located in the Chapter 7/R.28-700 provisions reviewed. But the statute has several specific presentation controls:

• the §108(3) warning must be clear and conspicuous, in a separate written document that the consumer can keep and that contains nothing else;
• the cancellation language must be bold face, conspicuous, and immediately proximate to the consumer's signature;
• a provider may not present a contract or other agreement for signature unless it has been fully filled in and completed. C015. South Carolina Legislature+1

Chapter 7 also prohibits obtaining a consumer's waiver of rights under the chapter, using specified mandatory ancillary purchases, charging a DMP rescission fee, using unfair/deceptive contract terms, and collecting payment before earned as specifically defined in the contract. A violation of §37-7-116 renders the agreement between the licensee and consumer void. That voidness rule is directly relevant to agreement validity; broader remedies are reserved for later passes. C016. South Carolina Legislature

A2. Electronic execution, electronic delivery, and consent limits

South Carolina's Uniform Electronic Transactions Act provides the general state-law framework.

An electronic record or signature cannot be denied legal effect solely because it is electronic; an electronic record can satisfy a writing requirement and an electronic signature can satisfy a signature requirement. But the Act applies only when the parties have agreed to conduct the transaction electronically. A party is not automatically required to transact electronically merely because another party prefers it. C017. South Carolina Legislature

Where another law requires information to be provided, sent, or delivered in writing, an electronic record can satisfy that requirement only if it is capable of retention by the recipient when received. A sender cannot inhibit the recipient's ability to print or store the record, and any other statutory formatting or transmission requirements continue to apply. C018. South Carolina Legislature

This supports the following bounded conclusions:

• A §37-7-110 contract is not invalid merely because it uses an electronic record/signature, assuming UETA's party-agreement requirements and all other statutory requirements are met.
• A required disclosure that must be in a form the consumer can keep cannot safely be implemented as an ephemeral screen that the consumer cannot retain.
• Electronic form does not excuse the statutory placement, conspicuousness, or content restrictions.
• The separate DCA procedural instruction that the DMP creditor-consent form be kept on paper remains a distinct administrative requirement. C013, C017–C019.

South Carolina's UETA expressly preserves the federal E-SIGN Act's §101(c) consumer-disclosure framework rather than superseding it. This PASS-03 did not perform a full fresh 2026 federal E-SIGN investigation, so an electronic consumer-consent implementation requiring federal §101(c) compliance remains an exact implementation dependency. C019. South Carolina Legislature

A3. Cancellation, termination, refunds, and deadlines

A3.1 Continuous cancellation right, not a fixed cooling-off window

The mandatory contract language must tell the consumer that the consumer:

• may cancel without penalty or obligation;
• may do so for any reason;
• may do so at any time;
• does so by providing 10 days' written notice of rescission; and
• after services are canceled, is entitled to a refund of all unexpended funds paid to the organization. C020. South Carolina Legislature

Section 37-7-110(D) separately commands the licensee to cancel a DMP upon the consumer's request for any reason and at any time, with the consumer providing at least ten days' notice, followed by a full refund of all unexpended funds paid to the licensee. C021. South Carolina Legislature

This is better described as a continuing termination right with notice, not a conventional three-day or seven-day cooling-off period. C022.

A3.2 Written notice and method

The mandatory contractual statement expressly requires written notice. The Act does not, in the cancellation clauses reviewed, enumerate postal mail, personal delivery, fax, or email as the required method.

South Carolina UETA can make an electronic record a writing where its requirements apply, but whether a particular email, portal message, or click-based cancellation satisfies the contract and all consumer-consent rules depends on the transaction's agreed electronic framework. C023. South Carolina Legislature

A provider therefore should not infer from §37-7-109's express authorization of email for creditor consent that the same statutory list automatically governs consumer cancellation. They are different provisions.

A3.3 Legal counting rule: exact calendar endpoint held

Chapter 7's cancellation provisions say “10 days” / “at least ten days” but the provisions reviewed in PASS-03 do not supply a specific private-contract counting rule stating, for example, whether:

• the notice date is included or excluded;
• receipt or transmission starts the period;
• weekends or holidays are counted;
• the cancellation becomes effective at the beginning or end of the tenth day.

South Carolina Rule of Civil Procedure 6 contains a time-computation system for litigation/procedural deadlines, but this pass found no authority making that court-procedure rule the counting rule for a private Chapter 7 cancellation notice. It is therefore not imported here.

C024: No exact calendar cancellation endpoint is claimed without further authority plus actual delivery facts.

A3.4 What must be refunded

The statutory cancellation measure is all unexpended funds paid to the licensee. It does not say “refund every amount the consumer has ever paid,” and it should not be silently converted into a refund of creditor payments already disbursed or every previously earned lawful fee. C025. South Carolina Legislature

Separate rules must remain separate:

1. Unexpended client funds: refunded on cancellation under §110.
2. Conditional DMP setup-fee refund: §109(A) requires return of the setup fee and account closure if, within the statutory 45-day condition, creditor nonconsent makes the plan unsuitable.
3. Unlawfully received money: R.28-700 separately requires return to the payor of money received in violation of the Act or regulation.
4. Already disbursed creditor money: is not “unexpended” merely because the consumer later terminates.
5. Earned lawful provider compensation: is not automatically converted by §110(D)'s language into unexpended creditor money. Whether a disputed fee was lawfully earned remains a separate question. C025–C027. South Carolina Legislature+1

Refund timing

Section 110 says that after cancellation the consumer is entitled to the refund, but the provisions reviewed do not specify an independent “within X days after cancellation” payment deadline for the unexpended-funds refund.

C028: exact refund-payment deadline remains held.

That is different from §111's explicit time requirements for depositing and disbursing creditor funds.

A4. Client-money custody, control, accounts, and records

A4.1 Trigger for the statutory trust-account regime

Section 37-7-111 says that funds paid by or on behalf of a consumer to a licensee for disbursement to the consumer's creditors must be deposited into a trust account established by the licensee for the benefit of debtors. C029. South Carolina Legislature

This is an actual money-flow trigger.

A truly noncustodial negotiation arrangement—consumer retains the settlement funds and pays creditors directly—does not become subject to §111's deposit rule merely because the provider negotiates. The provider can still be covered by Chapter 7 as a negotiation service; it simply has not received the particular funds described by §111. C030. South Carolina Legislature+1

But “noncustodial” cannot be assumed from branding. The DMP definition expressly includes giving the organization control of funds, not only physical receipt. If a provider or its agent can direct, restrict, or cause distributions from an account, the actual control arrangement requires analysis before classifying the model as noncustodial. C031. South Carolina Legislature

A4.2 Trust and segregation duties

For funds within §111:

• the licensee establishes the trust account for debtors' benefit;
• separate account records must be kept for each debtor;
• debtor money must at all times remain separate from the funds of the licensee and its officers, employees, and agents;
• debtor funds may not be used for purposes other than paying the debtor's bills, invoices, and accounts. C032. South Carolina Legislature

This pass does not interpret the last clause as affirmative authorization to deduct any particular provider fee from trust funds. The quarterly accounting provision separately requires reporting “charges deducted,” but that accounting language does not by itself establish that every otherwise lawful fee can be removed from the trust balance. C033 — HOLD on precise provider-fee deduction mechanics.

A4.3 Deposit deadline

The licensee must deposit a debtor's payment into the trust account no later than one business day after receipt. C034. South Carolina Legislature

This is a business-day deadline, not a one-calendar-day rule.

A4.4 Creditor disbursement deadline

Funds received for creditor distribution must be disbursed to creditors no later than five business days after receipt. C035. South Carolina Legislature

The provider also bears responsibility for correcting payments misdirected because of its own error. C036.

These provisions materially constrain any model in which the provider plans to accumulate creditor-payment money for an extended period.

A4.5 Consumer receipts and access

Upon request, the licensee must provide either signed, dated receipts for money received under the DMP or an electronic means by which the consumer can obtain the account status. C037. South Carolina Legislature

This provision permits electronic account-status access; it is distinct from the paper creditor-consent instruction discussed above.

A4.6 Monthly reconciliation

The licensee must reconcile each trust account at least monthly by comparing:

• the actual cash balance; against
• the total of the individual escrow balances for each debtor.

Each trust account must be separately scheduled and reconciled. C038. South Carolina Legislature

The text requires reconciliation but, in the passages reviewed, does not prescribe a specific numerical tolerance or a separate cure period for an unexplained shortfall. A discrepancy therefore cannot simply be treated as acceptable because it is small.

A4.7 Quarterly accounting and demand accounting

At least quarterly, the consumer accounting must show:

• total funds received;
• total paid to each creditor;
• the total each creditor agreed to accept in full satisfaction;
• charges deducted; and
• the amount held in trust. C039. South Carolina Legislature

On written demand, an accounting must be provided within seven days, although the licensee need not provide more than three such accountings during each six-month period. C040. South Carolina Legislature

Again, without an established private-law counting rule and actual receipt facts, this pass does not convert “within seven days after written demand” into an exact calendar date.

A4.8 FDIC-insured institution language

R.28-700's recordkeeping section requires the organization to maintain the name and address of the FDIC-insured institution where South Carolina consumer funds are held, together with the account number. C041. South Carolina Legislature

This is consequential but should be described carefully: the provision is drafted as a recordkeeping requirement, not as a standalone sentence saying “all trust accounts must be at an FDIC-insured institution.” Its wording nevertheless presupposes an FDIC-insured institution for the identified South Carolina consumer funds.

I therefore treat:

Use of an FDIC-insured institution as strongly supported by the operative regulation's required records, but do not recast the recordkeeping clause into broader account-eligibility language the regulation itself does not use.

A4.9 Third-party account administrators

Neither §37-7-111 nor the R.28-700 passages reviewed in this pass supplied a general authorization saying a licensed provider may outsource its statutory trust-account custody duties to an unaffiliated third-party administrator.

A third-party arrangement therefore presents at least three separate questions:

1. Who legally owns the funds?
2. Who actually has authority/control over withdrawals and distributions?
3. Is the third party acting as the licensee's agent or independently?

If the provider retains control, merely placing the account in another entity's name does not establish noncustodial treatment. If the consumer alone owns and controls the account, §111's “funds paid … to a licensee for disbursement” trigger may not apply to that account—but other law may.

C042: third-party custody/control authority remains unresolved and cannot be inferred from the counseling license.

A4.10 Records and retention

Section 37-7-114 requires complete and accurate books, accounts, and records and calls for retention of specified DMP-related records for at least three years after termination of the DMP. Records include consumer information, agreements/extensions, payments, disbursements, charges, and correspondence. Out-of-state records must be made available to DCA within the statutory time when demanded for examination. C043. South Carolina Legislature

R.28-700 adds detailed recordkeeping requirements, including:

• documents signed by and/or provided to consumers, including the budget analysis and contract;
• creditor-consent documentation;
• trust-account statements;
• the financial-institution/account information discussed above;
• additional business and consumer records.

The regulation requires consumer records for at least three years after termination of the contract and provides retention rules for business records tied to discontinuation of the relevant account, script, advertisement, contract, record, or complaint. It allows electronic data-processing systems or electronic duplicates when they provide equivalent information and remain accessible, subject to the specific DCA paper creditor-consent guidance already noted. C044. South Carolina Legislature

A5. Enactment, adoption, effective, and current-status reconciliation

Statute

The Consumer Credit Counseling Act originated in Act 111 of 2005 / S.607. The legislature's history shows the Act became law without the Governor's signature on June 2, 2005, with an effective date of December 2, 2005. C045. South Carolina Legislature

The South Carolina Legislature's online Code states that it is current through the 2026 legislative session, while also warning that the online compilation is not the official printed Code. That supports current statutory use here with the site's stated publication limitation. C046. South Carolina Legislature

Regulation

The currently posted R.28-700 history states:

• added effective May 26, 2006;
• amended effective June 26, 2009;
• amended effective February 26, 2016. C047. South Carolina Legislature

The Legislature's regulation-status page, however, says its online regulation compilation is current through State Register Volume 50, Issue 3, effective March 27, 2026. South Carolina Legislature

For this PASS-03 I independently checked the October 23, 2026 State Register, Volume 50 Issue 10. It contains no DCA/Chapter 28/credit-counseling amendment in its contents, and targeted searches returned no R.28-700/credit-counseling change. South Carolina Legislature+3

But I did not freshly reread every April–September 2026 issue in PASS-03. Because the user expressly instructed me not to adopt the prior-pass currentness conclusion as verified law, the proper PASS-03 status is:

C048: R.28-700 is the operative text shown in the official online compilation through March 27, 2026; no relevant change appears in the independently checked October 23 issue; the April–September 2026 intervening Register history is not independently reverified in this pass and remains a currentness dependency rather than being silently borrowed from PASS-01/PASS-02.

Agency interpretations and guidance

DCA's 7.108-1001 and 7.108-1003 are dated April 15 and June 29, 2010, respectively. DCA's current Chapter Seven index continues to post them, but expressly warns that interpretations may be superseded and should be confirmed before formal reliance. They are not regulations, judicial holdings, or formal adjudicatory orders. C049. Consumer Affairs

DCA's foreclosure counseling checklist and FAQ are agency procedural/compliance guidance. They are useful evidence of the Department's operating interpretation, but they do not displace statutory or regulatory text. C050. Consumer Affairs+1

B. PASS-03 source table

All sources below were actually accessed or freshly reused on October 24, 2026 Pacific. Direct destinations are supplied as source links because this interface renders web destinations as safe link objects rather than exposed raw URL strings.

C. PASS-03 material claim table

D. Bounded agreement / money-flow / cancellation examples

These examples demonstrate only verified contractual or custody mechanics. They do not assume a provider is licensed or exempt, do not create a lawful fee, and do not resolve earlier fee holds.

Example 1 — Compensated negotiation, consumer retains all settlement money

Facts

• Provider negotiates reductions with three unsecured creditors.
• Consumer pays creditors directly from the consumer's own bank account.
• Provider never receives or controls the creditor-payment funds.
• Assume only for this example that Chapter 7 applies and no exemption exists.

Result

The negotiation itself can be covered under §101(3)(c). The general education/budget-analysis and written-contract requirements apply before compensated services. The §111 trust-account deposit/disbursement mechanics do not attach merely because negotiation occurs, because the $0 of creditor-distribution funds in this example are paid to the licensee.

Client funds received for creditor distribution:

$0

Trust deposit required under §111 for those funds:

$0

This does not mean the provider has no Chapter7 obligations. It means the §111 custody trigger is absent on these stated facts. If the provider gains withdrawal authority or control over the consumer's account, classification must be redone. C001–C002, C005, C007, C029–C031.

Example 2 — $600 received for creditor distribution

Facts

• A covered custodial DMP receives $600 from the consumer exclusively for creditor distribution.
• No provider fee is included in the $600.
• Ignore actual calendar dates and use statutory business-day units.

Deposit

Base = $600 consumer creditor-payment money.

Required deposit:

$600 × 100% = $600

Deadline unit:

no later than 1 business day after receipt

Creditor distribution

Suppose the agreed allocations are:

• Creditor A: $250
• Creditor B: $200
• Creditor C: $150

Check:

$250 + $200 + $150 = $600

Required total disbursement:

$600

Deadline:

no later than 5 business days after receipt

No rounding issue exists because all amounts are whole cents/dollars as stated. C029, C032, C034–C035.

Example 3 — Cancellation after some creditor money has already been spent

Facts

• Consumer originally remitted $600 for creditors.
• $350 was validly disbursed to creditors before cancellation becomes effective.
• $250 remains unexpended.
• No disputed provider fee is included in this calculation.

Calculation:

Original client funds: $600

Less already disbursed creditor funds: −$350

Unexpended balance:

$600 − $350 = $250

Cancellation refund base = $250.

The statute does not turn the earlier $350 creditor payments back into “unexpended funds.”

If someone contends that an additional $20 provider charge should be deducted from the $250:

$250 − $20 = $230

is not accepted in this example unless separate authority establishes that the $20 was lawful, earned, and properly deductible from these trust funds. Otherwise the correct status is:

$250 undisputed unexpended client-fund base; proposed $20 deduction held.

This avoids double-deducting a fee previously paid elsewhere. C025, C033.

Example 4 — Monthly reconciliation

Assume individual debtor trust ledgers show:

• Debtor A: $120
• Debtor B: $230
• Debtor C: $150

Ledger total:

$120 + $230 + $150 = $500

Case A — bank cash = $500

Difference:

$500 actual cash − $500 debtor-ledger total = $0

Reconciliation balances.

Case B — bank cash = $490

Difference:

$490 − $500 = −$10

There is a $10 shortfall/discrepancy requiring investigation/correction. The statute requires monthly reconciliation; PASS-03 did not locate a provision authorizing a tolerance or giving a specific cure period for a $10 discrepancy.

Result: discrepancy identified; cure deadline held, not invented. C038.

Example 5 — Quarterly accounting arithmetic

Assume during the quarter:

Funds received: $900

Paid Creditor A: $300

Paid Creditor B: $250

No provider deductions are assumed.

Total creditor distributions:

$300 + $250 = $550

Expected amount held:

$900 − $550 = $350

The quarterly accounting must separately report receipts, each creditor payment, agreed full-satisfaction figures where applicable, charges deducted, and trust balance.

If actual reported trust balance is $340 with no lawful $10 deduction or other transaction:

Expected: $350

Actual: $340

Difference:

$340 − $350 = −$10

That is an unexplained $10 discrepancy, not a rounding adjustment. C039.

Example 6 — Ten-day cancellation: exact calendar date intentionally held

Facts

Assume the consumer gives a written cancellation notice on October 24, 2026.

Verified law says:

• cancellation may be requested at any time/any reason;
• the mandatory clause specifies 10 days' written notice;
• §110(D) requires at least ten days' notice.

What cannot safely be calculated from the reviewed provision alone is:

October 24 + ? counting convention = exact effective cancellation date

because this pass did not verify an applicable Chapter7/private-contract rule establishing whether the trigger is sending or receipt, whether day zero counts, or the treatment of weekends/holidays.

Result: exact endpoint HELD.

If $425 remains unexpended when cancellation legally becomes effective, refund base:

$425 × 100% = $425

But the statute reviewed does not provide an independent “refund must be paid within X days thereafter” deadline, so the payout date is also held. C020–C025, C028.

Example 7 — Conditional §109 setup refund without importing an old fee amount

Let X equal the amount of a setup fee that was independently lawful under the applicable fee rules.

Assume all §109(A) conditions occur:

• a DMP was established;
• within the statutory 45-day condition, creditor failure to consent makes the DMP unsuitable.

Refund operator:

X × 100% = X

Result:

the setup fee X must be returned and the account closed.

This example intentionally does not supply a dollar amount, because PASS-03 is not reopening fee ceilings. It also does not assign an exact calendar “day 45” endpoint without an established counting rule. C026.

Example 8 — Third-party “special purpose account”

Facts

Consumer deposits $2,000 in an account titled in the consumer's name. A separate account company appears in the documentation. The settlement provider can initiate or direct payments.

The visible title alone does not determine the legal result.

Questions required before classifying the money flow:

1. Can the consumer withdraw without provider permission?
2. Can the provider originate transfers?
3. Can the provider block transfers?
4. Is the account company the provider's agent?
5. Who has contractual control?
6. Is any money legally paid “to the licensee for disbursement”?

Until those facts are established:

$2,000 × unknown custody classification = HOLD

It is improper to call this automatically “noncustodial” merely because a third party holds the bank account. C031, C042.

E. PASS-03 component coverage and remaining gaps

F. Researcher self-check

This is a researcher self-check, not independent review.

Actually read in this pass

I freshly read the operative Chapter 7 provisions dealing with definitions/nexus, education and budget analysis, creditor consent, contracts, cancellation, trust funds, records, and prohibited contract practices. I also read the relevant R.28-700 recordkeeping/fee-contract passages and inspected the corresponding PDF pages rather than relying on search snippets. South Carolina Legislature+5

I freshly read South Carolina's UETA provisions relevant to electronic signatures, electronic records, retention, and party consent. South Carolina Legislature

I freshly inspected the page images of DCA Administrative Interpretations 7.108-1001 and 7.108-1003 for the limited issues used here, rather than assuming PASS-02's treatment was coordinator-approved. Consumer Affairs+3

I read the DCA counseling checklist and FAQ for agency procedural treatment and kept those materials subordinate to statute/regulation. Consumer Affairs+1

I checked the statute's current-publication statement, regulation compilation cutoff, enactment history, and the actual October23, 2026 State Register issue. South Carolina Legislature+3

Explicitly not established

I did not:

• establish SettleADebt.com or any other provider's authorization;
• rerun or validate the full PASS-01 fee analysis;
• deem PASS-02 coordinator-reviewed or adopt all of its conclusions;
• resolve the prior §109 setup-fee/contract sequencing hold;
• establish an exact private-law counting convention for the ten-day cancellation period or seven-day accounting period;
• establish a statutory refund-payout deadline where the reviewed text supplies none;
• establish blanket authority for third-party custody or special-purpose account administrators;
• establish that every provider fee may be deducted from the statutory trust account;
• freshly review every April–September 2026 State Register issue;
• conduct a complete federal E-SIGN analysis;
• conduct the broader bonds, insurance, examination, remedies, collection, limitations, secured-debt, local, tribal, sector, or comprehensive case-law passes;
• make a local write, file, publication, filing, contact, account change, or website change;
• claim independent review, publication readiness, full South Carolina acceptance, or A066 acceptance.

END S_SC PASS-03