Check a debt-help provider’s evidence

S_WA — PASS-01

Washington provider market access and consumer fees

Research baseline and actual access date: October 22, 2026, Pacific. The corresponding UTC access date was October 23. This investigation used ordinary web search and opened source passages.

Washington currently regulates compensated debt adjustment under chapter 18.28 RCW without a general debt-adjuster licensing program. The former licensing provisions were repealed in 1999. The chapter permits reasonable contractual fees subject to substantial restrictions; it does not categorically prohibit for-profit debt adjustment. Separate licensing can apply to money transmission and independent account administration. The proposed July 2026 debt-adjuster licensing system in HB 1599 was not established as enacted law. [C007–C009, C012–C013] app.leg.wa.gov+2

The most consequential fee findings are:

• 15% of contract-listed debt: the aggregate ceiling includes relevant adjuster, financial-institution, and third-party account-administrator fees.
• 15% of each payment: a separate restriction limits fees retained by the adjuster from payments made by or for the debtor.
• $25 initial charge: included in total fees, with a cumulative-payment credit restriction.
• Federal timing remains separate: where the Telemarketing Sales Rule applies, the state ceiling does not authorize requesting or receiving an advance provider fee.
• Referral compensation is a material business-model restriction: covered adjusters may not pay compensation for referring prospective customers. [C014, C017–C019, C030] app.leg.wa.gov+2

Status of this deliverable: findings for this component only. Provider-specific authorization, complete Washington acceptance, and A066 acceptance are not established.

For compact cross-references, S001 means S_WA-P1-S001, and C001 means S_WA-P1-C001. The source and claim tables preserve the full identifiers.

A. Substantive findings

1. What Washington classifies as debt adjustment

Conduct controls the classification

RCW 18.28.010(1)–(3) covers a person conducting—or holding itself out as conducting—a compensated debt-adjusting business. Its activities include debt management, counseling, settlement, adjustment, proration, liquidation, and receiving money for distribution among creditors. Receiving money is an alternative basis for coverage, rather than a prerequisite for every covered service. [C001; S001 §.010(1)–(3)] app.leg.wa.gov

Consumer versus business debt. Chapter 18.28’s operative definition does not contain a general personal/family/household-purpose limitation. The specific exclusion for nonprofits handling exclusively commercial-enterprise debts owed to business creditors therefore matters: it is not a general exclusion for all business-debt settlement. The state definition also does not contain the federal TSR’s unsecured-creditor limitation. This does not clear secured-debt or sector-specific activities under other laws. [C002, C005; S001 §.010(1)(f), (2)]

Case-law confirmation and limitation. In Carlsen v. Global Client Solutions, the Washington Supreme Court explained that a settlement company’s actual management and settlement activities can fall within the statute even when its precise business model was not anticipated by the legislature. The court left factual classification to the federal district court. Its 2011 account-administrator analysis must be read alongside the legislature’s subsequent 2012 changes, which expressly addressed administrators and their fees. [C001, C004, C012; S015, opinion pp. 7–15; S006 §§1–3] cases.justia.com+2

Washington residents and remote providers

An out-of-state location does not itself establish an exemption. In Gorden v. Lloyd Ward & Associates, the published appellate slip opinion upheld personal jurisdiction on facts involving solicitation of Washington residents, contracts with them, and receipt of their payments. That is a bounded jurisdictional holding, not a universal choice-of-law rule for every online interaction. [C010; S014, printed pp. 13–15] courts.wa.gov

A remote operating design also encounters RCW 18.28.110(1), which expressly requires covered records and undistributed payments to be maintained in Washington. Whether a particular remote records and account arrangement complies remains for the funds-and-records pass. No remote-provider operating approval is inferred here. [C011; S001 §.110(1)] app.leg.wa.gov

2. Market access, exclusions, and prohibited models

General debt-adjuster market access

The current legal structure is conditional substantive permission, rather than a current general debt-adjuster license or a categorical ban:

• RCW 18.28.080 permits a reasonable fee by contract.
• Former license, application, qualification, and bond provisions were repealed effective July 1, 1999.
• The associated substantive licensing rules were repealed in 1999; remaining procedural rules were repealed in 2001.
• AG enforcement and DFI fee-enforcement authority remain. [C007–C008, C034; S001–S005] app.leg.wa.gov+3

HB 1599 is a status trap. Its bill analysis describes licensing beginning July 1, 2026, and a separate debt-resolution framework. The actual bill history shows a 2025 introduction/hearing and January 12, 2026 reintroduction and retention, without enactment. The proposed commencement date has passed, but that does not make the proposal operative. [C009; S008–S009] lawfilesext.leg.wa.gov+1

Every exclusion in current RCW 18.28.010(1)

[C003–C006; S001 §.010(1)(a)–(g); S007 §1.] app.leg.wa.gov+1

Self-creditor boundary. Current chapter 18.28 has no blanket express exclusion for every original creditor. An ordinary creditor compromising its own receivable without operating a compensated debt-adjustment service presents a different classification question, but that is not equivalent to an express categorical exemption. The employee and institutional exclusions must be applied on their actual terms. [C006]

Attorney-connected operations. Apart from the incidental-professional exclusion, §.130 restricts covered adjusters, managers, and employees from providing legal services, claiming legal competence, exercising specified authority over attorney engagements, or communicating in an attorney’s name. An attorney connection cannot simply be attached to a commercial operation to avoid these rules. [C015; S001 §.130(1)–(4)] app.leg.wa.gov

Custodial operations and independent account administrators

RCW 19.230.350 creates a separate pathway for a qualifying independent third-party account administrator:

• Money-transmitter licensure is required, subject to the statute’s exclusion of entities otherwise exempt under §19.230.020.
• The administrator must be independent of the adjuster, including no ownership, control, or affiliation.
• Funds belong to the debtor and must be held at an insured institution.
• Referral compensation involving the adjuster is prohibited.
• Withdrawal and refund protections apply. [C012, C027; S010 §.350(1), (3)(b)] app.leg.wa.gov

That license does not license the associated settlement business or establish that its fees comply.

For other custodial arrangements, §19.230.030 requires a money-transmitter license, authorized-delegate status, or an applicable exclusion if the activity constitutes money transmission. Chapter 18.28 compliance is not itself a general money-transmission exemption. Relevant §19.230.020 exclusions have their own institutional, ancillary-service, or payment-processing conditions; the claimant bears the burden of establishing an exclusion. [C013; S010 §§.010(18), .020, .030] app.leg.wa.gov+2

Compensation restrictions relevant to SettleADebt.com

A covered adjuster cannot:

• Pay or offer compensation for referring a prospective customer.
• Receive compensation from someone other than the debtor or someone acting on the debtor’s behalf, except qualifying nonprofit fair-share contributions.
• Take a promissory note, other promise to pay, mortgage, or security for its fee.
• Lend money or credit. [C014, C040; S001 §.120(2), (3), (7), (8)] app.leg.wa.gov

Consequently, a paid referral arrangement with a covered Washington adjuster has not been established as a lawful revenue pathway. Whether a particular advertising purchase constitutes a prohibited referral payment requires examination of its actual compensation trigger and deliverables; no advertising-label exception is assumed.

3. Current consumer fee structures and limits

Operative fee rules

These rules apply to a covered, nonexcluded debt adjuster. The statute requires reasonableness and a contract; numerical ceilings are not automatic entitlements.

[C016–C022, C028; S001 §§.010(1)(g), .080; S006 §2; S007 §2.] app.leg.wa.gov+2

The state aggregate base is contract-listed debt, not simply the debt already settled, the amount saved, or the amount currently being paid to a creditor. The separate payment limit prevents treating the aggregate ceiling as an amount that can automatically be collected at the first settlement.

Fair share is a narrow exception

Fair share consists of qualifying creditor contributions to nonprofit adjusters associated with consumers receiving adjusting services and paying down debt. The definition excludes grants for unrelated services. The 2015 law expressly:

1. Excepted these contributions from the per-payment fee restriction.
2. Allowed them under the otherwise applicable prohibition on third-party compensation.

The text does not expressly place a fair-share exclusion in every fee-cap sentence. Its aggregate-cap treatment is held pending more specific authority. A debtor surcharge cannot be treated as creditor-paid fair share merely by naming it that way. [C028; S001 §§.010(4), .080(1), .120(8); S007 §§1–3] lawfilesext.leg.wa.gov

Historical reconciliation

[C008–C009, C022, C036; S002–S009, S027–S028.]

The still-codified nonprofit reporting provision names June 30, 2016 and June 30, 2017 deadlines. Those historical reporting dates do not establish a recurring 2026 registration process. [C036; S001 §.800]

4. When fees may be requested, received, or retained

Washington requirements

The distinctions among contracting, receiving money, retaining a fee, and distributing money matter:

• Contracting: the fee must be reasonable, with its rate and amount precisely disclosed. Contracting for an excessive charge can itself trigger §.090.
• Receipt: payments received by an adjuster must enter the statutory trust arrangement immediately.
• Retention: the adjuster may not retain a fee before notifying all creditors listed by the debtor of the program.
• Direct custody: §.110(4) requires distribution to creditors, at least every 40 days after receipt, of at least 85% of each debtor payment. A provider-held accumulation model cannot simply disregard this requirement. [C011, C016, C023–C024; S001 §§.080(2), .090, .100(3), .110(4), .150(1)] app.leg.wa.gov+4

Chapter 18.28’s fee provision does not itself state the TSR’s universal settlement-agreement-plus-first-payment trigger. That observation does not create permission to collect an advance fee where federal law or another applicable statute prohibits it.

Federal TSR — common context, independently applicable

The current eCFR text defines debt-relief services by represented alteration of debt terms involving unsecured creditors or debt collectors. Telemarketing involves a sales-inducement plan using telephones and more than one interstate call. Inbound responses to debt-relief advertisements and direct-mail solicitations do not receive the usual corresponding inbound exemptions. A purely online transaction cannot be classified as telemarketing without the necessary facts. [C029; S016 §§310.2(o), (ii), 310.6(b)(5)–(7)] ecfr.gov+3

For a covered transaction, 16 CFR 310.4(a)(5)(i) prohibits requesting or receiving provider fees until:

1. At least one debt has actually been renegotiated, settled, reduced, or otherwise altered through a valid customer-executed agreement.
2. The customer has made at least one payment under the customer-creditor or debt-collector agreement.
3. For debts resolved individually, fees comply with either the proportional-enrolled-debt method or the consistent-percentage-of-savings method.

The savings method uses the enrollment debt amount minus the amount actually paid to satisfy that debt. It does not permit changing the fee percentage between the customer’s individual debts. [C030–C031; S016 §310.4(a)(5)(i)(A)–(C)] ecfr.gov

A qualifying dedicated account may accumulate consumer-owned funds before provider fees are earned, but §310.4(a)(5)(ii) requires an insured institution, consumer ownership and interest, an independent administrator, no referral compensation, and penalty-free withdrawal with the prescribed refund. Depositing funds into that account does not itself earn the provider’s fee. [C032]

There is no general TSR attorney exemption. FTC guidance distinguishes bona fide nonprofits from false nonprofit claims; the state’s nonprofit exclusion and federal coverage analysis are separate. Face-to-face and other federal exceptions require their actual conditions. [C033; S016 §310.6(b); S018, coverage Q&As] Federal Trade Commission+1

Cancellation, credits, and refunds

[C024–C027; S001 §§.090, .100(7)(c), .150(2); S010 §.350(1)(e).] app.leg.wa.gov+3

Where the federal dedicated-account rule applies, its penalty-free withdrawal protection cannot be displaced merely by citing Washington’s cancellation-fee ceiling.

5. Public permission, application procedure, and lookup evidence

What is established

General debt adjusting: no current general license application was established because the underlying statutory licensing program was repealed. The continuing substantive requirements supply the legal framework. Neither a business registration nor an unrelated financial license proves compliance with it.

Independent account administration/money transmission: the current application rule, WAC 208-690-030, directs filing through NMLS, with statutory application information, responsible-person and entity information, bond requirements, fees, and other applicable submissions. Its latest listed amendment is effective August 1, 2018, under WSR 18-13-108. [C013; S011–S012] app.leg.wa.gov+3

The official ORIA catalog’s DFI entry also identifies NMLS as the application channel. However, the catalog is dated May 16, 2025 and labels the underlying application/submittal information “07/2013.” It corroborates the channel; it does not establish that its numerical fees, processing estimates, or checklist are the latest requirements. [C013, C035; S013, p.81] oria.wa.gov

What remains unverified

The DFI licensing and verification pages returned 403 errors. The historical NMLS checklist URL redirected to a resource-center page without the checklist text. NMLS Consumer Access returned 404 through the retrieval route.

Accordingly:

• The statutory application channel is verified.
• A usable current operational checklist and live lookup result are held.
• No named provider’s license, exemption, registration, or compliance status was established. [C035; S023–S026]

Hybrid-service boundary

Paid credit improvement, credit procurement, foreclosure-delay services, or related advice may separately trigger chapter 19.134 RCW. Its exclusions differ from chapter 18.28. Section 19.134.020(1)(a) contains a full-performance fee rule with a state-law bond-and-trust exception. That exception does not establish clearance under federal credit-repair law, whose advance-payment restriction was also checked. No hybrid credit-repair/settlement fee package is approved by this pass. [C037–C038; S019–S021] app.leg.wa.gov+3

Questions 6 and 7 are completed through the worked examples and component coverage table in section D below.

B. Source register

Access convention: every “Read” or “Failed” entry below was checked on 2026-10-22 Pacific. “Read” means substantive passages were retrieved and examined, not merely a search result. One identifier is reused across sections of the same statute or rule collection.

B1. Sources read

B2. Failed or incomplete retrievals

These are evidence of retrieval limitations, not substantive proof of the underlying legal proposition.

C. Claim ledger

Confidence convention: “High” concerns the stated text or verified procedural history. It does not establish a particular business’s compliance. “Bounded” identifies a factual, interpretive, source-version, or currentness limitation.

D. Worked examples and component coverage

D1. Bounded plain-text examples

Common conditions: These examples test identified ceilings or boundaries. A positive arithmetic remainder is not proof that a fee is earned. Actual collection requires the applicable classification, reasonable disclosed contract, creditor notices, lawful funds handling, and independently applicable federal timing. Unless specified otherwise, there are no housing rent/utility payments, fair-share contributions, or other account fees.

All amounts are US dollars. The calculations below produce exact dollars or cents; no statutory rounding method or CPI adjustment is assumed.

Example 1 — Aggregate headroom does not permit a larger payment deduction

Inputs: Contract-listed debt $10,000; current debtor payment $200; no previous fees; no initial charge.

Aggregate base/operator: $10,000 × 0.15 = $1,500.

Payment base/operator: $200 × 0.15 = $30.

Result: The payment-based ceiling is $30. A $50 deduction exceeds it by $20 even though the aggregate ceiling has ample room.

For a directly received payment subject to §.110(4), $200 − $30 = $170 corresponds to the required 85% creditor-distribution amount.

Conditions: Fee eligibility must already exist; where TSR applies, the required creditor payment cannot be replaced by merely making this deposit. [C011, C017–C018, C023, C030]

Example 2 — Credit for a previously retained initial charge

Inputs: Records show $25 previously retained as an initial charge; cumulative payments including the current $100 payment equal $200; proposed additional retention $15.

Cumulative base/operator: $200 × 0.15 = $30.

Intermediate: $30 − $25 previously retained = $5 arithmetic headroom.

Current-payment ceiling: $100 × 0.15 = $15.

Result: Proposed additional $15 would produce $40 cumulative fees, exceeding the $30 cumulative limit by $10.

The $5 remainder remains conditional on verification that the initial charge was lawfully retained and that all present collection conditions are met. This calculation does not validate the earlier collection history. [C018–C019, C023, C039]

Example 3 — Lower debt reduces the available initial charge

Inputs: Contract-listed debt $100; proposed initial fee $25.

Base/operator: $100 × 0.15 = $15 aggregate ceiling.

Comparison: $25 − $15 = $10 above the aggregate ceiling.

Result: The $25 initial-charge ceiling does not establish a right to charge $25 on this $100 debt. Any smaller amount still needs the applicable payment and timing conditions. [C017–C019]

Example 4 — Administrator and bank fees consume aggregate capacity

Inputs: Listed debt $20,000; proposed adjuster fees $2,900; administrator fees $150; related financial-institution fees $50.

Combined fee calculation: $2,900 + $150 + $50 = $3,100.

Aggregate base/operator: $20,000 × 0.15 = $3,000.

Result: Combined proposed charges exceed the ceiling by $100. Payment-specific and timing requirements remain additional restrictions. [C017]

Example 5 — A partial settlement and savings formula can still fail Washington’s payment limit

Inputs: Two listed debts of $10,000 each; one settles for $5,000. Proposed fee is 25% of that debt’s savings. One debtor remittance of $6,250 funds the settlement and proposed fee.

Savings calculation: $10,000 − $5,000 = $5,000.

Proposed fee: $5,000 × 0.25 = $1,250.

State aggregate ceiling: $20,000 × 0.15 = $3,000.

Modeled payment ceiling: $6,250 × 0.15 = $937.50.

Result: The $1,250 fee is below the aggregate ceiling but exceeds the modeled payment ceiling by $312.50.

Conditions: This assumes that $6,250 is the relevant single debtor payment from which the fee would be retained. Complex transfers require a verified payment-base analysis. Federal permission to use a consistent savings percentage does not establish a Washington savings-fee safe harbor. [C017–C018, C022, C031, C039]

Example 6 — Federal allocation after one debt resolves

Inputs: Total enrolled debt $20,000; agreed total fee $2,000; first resolved debt’s enrollment balance $5,000.

Ratio: $5,000 ÷ $20,000 = 0.25.

Allocated fee: $2,000 × 0.25 = $500.

Result: $500 is the federal proportional allocation for that debt, assuming a qualifying executed agreement and first creditor payment.

If the first creditor payment has not occurred, the presently requestable/receivable provider fee under the applicable TSR restriction is $0. Even after it occurs, Washington’s fee and payment limits remain to be satisfied. [C030–C031]

Example 7 — Cancellation formula, previous fees, and trust restriction

Inputs: Debtor cancels before completion; qualifying remaining debt that was due at entry is $300; previously lawful fees total $100; aggregate headroom is sufficient.

Calculation: $300 × 0.06 = $18.

Dollar comparison: Minimum of $18 and $25 = $18.

Total with previous fees: $100 + $18 = $118.

Result: The state cancellation formula yields $18. Section .150 does not permit taking that cancellation amount from the adjuster’s trust account.

Boundary: If the qualifying remaining debt were $1,000, 6% would be $60, reduced by the dollar ceiling to $25. Actual collection remains subject to the rescission, contract and federal conditions; penalty-free dedicated-account withdrawal is not displaced. [C021, C025–C027, C032]

Example 8 — Different cancellation destinations for different account models

Inputs: Account balance $1,000; $100 in otherwise authorized and earned ordinary adjuster fees remains payable.

Arithmetic: $1,000 − $100 = $900.

Direct adjuster trust model: Under ordinary §.150(2) closeout, the $900 goes to creditors within the applicable five-/30-day deadline. No cancellation fee is deducted from this account.

Independent administrator model: Under §19.230.350(1)(e), the $900 returns to the debtor within seven business days, assuming the $100 meets all applicable earning requirements.

Boundary: Overcharge voiding, timely statutory rescission, or another applicable law may change the analysis. [C024–C027]

Example 9 — Contracted overcharge can require return beyond the excess alone

Inputs: Listed debt $2,000; contracted fee $400; payments received $1,000; creditor distributions $850. Assume the §.090 trigger is established and the accidental-bona-fide-error exception does not apply.

Aggregate ceiling: $2,000 × 0.15 = $300.

Contracted excess: $400 − $300 = $100.

Statutory return base: $1,000 received − $850 distributed = $150.

Result: Section .090 requires return of the $150 not distributed to creditors, rather than merely the $100 contracted excess. Other remedies remain outside this calculation. [C017, C024]

Example 10 — Nonprofit threshold and referral-payment boundary

Nonprofit inputs: Organization otherwise qualifies as nonprofit; only debtor service charge is $15 in the month.

Comparison: $15 ≤ $15: the charge condition for §.010(1)(g) is met.

Change the charge to $15.01: $15.01 > $15, so that exclusion is unavailable. The extra cent does not by itself prove the service is prohibited; the organization must establish another exclusion or comply as a covered adjuster. Separate setup charges and fee aggregation remain held. [C005, C039]

Referral inputs: Covered adjuster offers $100 for each prospective customer referred.

Classification: Payment is compensation for a prospective-customer referral.

Result: Section .120(7) prohibits the modeled payment. No numerical fee calculation or ordinary license application makes this arrangement permissible. [C014]

D2. Component coverage and exact next investigations

E. Researcher self-check

Actually read: current statutory passages supporting the classification, exclusions, fees, notices and refund findings; official licensing dispositions; both complete historical debt-adjuster repeal orders; relevant enacted 2012 and 2015 session-law passages and effective-date certifications; HB 1599’s actual displayed history; current money-transmitter application rule and relevant adoption language; the official catalog entry; the relevant judicial text with its version limitations; current eCFR fee, definition and exemption provisions; and the identified FTC guidance.

Not treated as read authority: search snippets, association/provider fee charts, blocked AG/DFI pages, missing NMLS checklist text, or a live provider lookup result. The original Carlsen judicial text was read from a mirror, while its official court metadata was separately checked. Revised official versions and current subsequent treatment of the cited cases remain held.

Limits preserved: historical reporting is not registration; proposed licensing is not current law; an administrator’s license does not establish a negotiator’s authorization; the state ceiling does not establish federal fee timing; and arithmetic headroom does not establish an earned fee.

No local deliverable, publication, application, contact, account change, or provider authorization is claimed. This is a researcher self-check, not an independent review.

END S_WA PASS-01.