Florida Makes Miscellaneous Bond Changes Affecting Many

Florida Makes Miscellaneous Bond Changes Affecting Many

Date Enacted:   June 13, 2014

Date Effective:  July 14, 2014

Florida’s health studio, pawnbroker, commercial telephone sellers and sellers of travel law brings many changes for a variety of professions in the state. Many of these changes cover how bond claims may be made against these businesses. Some of these updates go further to protect consumers when businesses fail.

Health Studio Bond Changes

Florida’s HB 7051 revises statutes for health studios. The existing law stated that a surety bond was to be used to aid individuals harmed by the breaking of a relevant law. The amendments change the process in place for pursuing damages. This means that now if a health studio goes out of business after collecting long-term membership fees, the members will be provided with a means to recoup some of their losses.

Claims against the health studio license bond (or certificate of deposit) can now be decided through civil actions or administrative proceedings and may only be paid if ordered by the Department of Agriculture and Consumer Services (Department). The amount paid will be awarded based upon the liability established by the proceeding.

This differs from the existing law, which stipulates that the surety’s total liability to all individuals for failing to meet the conditions of the bonds couldn’t surpass the bond amount.

With such drastic changes to the bond claim process, you may need to learn more about health studio license bonds, also known as health club bonds, and why you need them.

What Pawnbrokers Need to Know

This law amends s. 35 539.001, F.S. Due to the change, consumer complaints can now be made against some pawnbrokers’ license bonds.

The civil penalties and administrative fines for pawnbroker licensees have also been modified by this bond statute. According to the law, pawnbrokers must have a net worth of $50,000 or obtain a pawnbroker license bond of $10,000 per license in order to be eligible for a license in the state. The licensee may also carry a certificate of deposit or letter of credit in place of the surety bond. If you haven’t had to carry one before, you many need to learn how to get your Florida Pawnbroking License bond.

Commercial Telephone Sellers and License Bond Changes

In the past, a commercial telephone seller’s license bond was conditioned upon compliance with the pertinent law. Florida’s amended HB 7051 requires that the bond required by the current law is in favor of the Department.

The bond must be used to pay damages incurred by the purchaser when the seller has committed fraud, breach of contract, violated an applicable law, has financial failure or misrepresented themselves.

Changes to Know for Sellers of Travel

The revisions to Florida law change rules for consumer claims regarding travel sales. Consumer claims may now be made against some bonds posted by sellers of travel.

Repealed Requirements for Dance Studios

The existing law required a license bond for dance studios. The amount of the dance studio license bond was calculated based on the number of years the studio was open.

This law has been eliminated. The bond obligation was eliminated when the law was removed.

Additional Details

Existing laws required license bonds for health studios, pawnbrokers, commercial telephone sellers and sellers of travel. Under the revised law, consumers must make claims on these bonds through the Department of Agriculture and Consumer Services.

Further changes require a licensee to pay any damages determined by a final order of the Department within 30 days of the order being entered for disbursement.

When a health studio doesn’t forward payment, the Department will request payment from the surety. If the surety fails to pay the claim, then it is permissible for the Department to file an action in circuit court to salvage the compensation up to the amount of the bond (or other security).

If the Department is found in the right, then it may also request additional compensation for court fees and attorney fees.

For more information, read the full Florida Health Studio, Pawnbroker, Commercial Telephone Sellers and Sellers of Travel Act.
Do these amendments affect you? What are your thoughts on the new bonding requirements?