Changes in Business Licensing Laws
Business licensing laws change frequently and can lead to unintentional unlicensed activities. An established business entity may suddenly be required to obtain a new or different type of license. A state or local government may deem even widespread business practices illegal. Businesses conducting unlicensed activities may be fined, cited, or even closed.
The impact of state penalties can be devastating on a business. The owner of the Foreclosure Center in Miami faced steep penalties when it was found that the business was operating without a mortgage broker license after Florida changed the definition of a mortgage broker to include loan modification services1. The owner agreed to pay $60,000 in fines and eventually the business was closed2.
In another instance, a Chicago-based debt settlement company, Legal Helpers, was fined $314,000 and was issued a cease-and-desist order of its unlicensed business by the Illinois Department of Financial and Professional Regulation3.
The penalties were assessed after several suits by the state charging the business with violation of the Debt Settlement Consumer Protection Act - enacted in Illinois in 2010. The Act prohibits debt management companies from charging upfront fees. When the law changed, the company’s business practices became illegal, and they were punished severely.
Businesses risk not being properly licensed when they operate without ongoing compliance monitoring. It is easy for a business to lose track of certain changes in licensing requirements and very difficult to repair the damage from operating without the required license. Don’t let it happen to your business. Work with the experts at LicenseLogix to streamline your business licensing and avoid these critical compliance errors!1 Owers, Paul, (2009, Dec. 4) Beginning Jan. 1., loan modifiers must have Florida license. SunSentinel.com
2 (2011, Aug. 3) Foreclosure Center owner fined for unlicensed loan modification. South Florida Business Journal
3 Cancino, Alejandra (2011, Aug. 11) Chicago debt settlement company fined $314K for unlicensed business. Chicagotribune.com