The IAPDA Code of Ethics

 

 

Preamble and Applicability


This Code of Ethics (the "Code") has been adopted by IAPDA to provide principles and rules to all persons whom it has recognized and certified to use the "CDA", "Certified Debt Arbitrator" and "CDS", "Certified Debt Specialist" designations. These designations are owned by the International Association of Professional Debt Arbitrators ("IAPDA"), and IAPDA is the sole organization authorized to award them. IAPDA determines who is recognized and certified to use these designations. Implicit in IAPDA's acceptance of this authorization is an obligation not only to ensure compliance with the mandates and requirements of all applicable laws and regulations, but also to require its CDA and CDS designated professionals to act in an ethical and professionally responsible manner becoming of the debt settlement profession.

For purposes of this Code, a person recognized and certified by IAPDA to use the designations is called a CDA and CDS professional. This Code applies to CDA and CDS professionals actively involved in the practice of debt settlement. In addition, some principles, specifically Principle 1 and Principle 6, also apply more generally to the activities of CDA and CDS professionals even when acting outside the scope of their capacity as debt settlement practitioners.


Composition and Scope


The Code consists of two parts: Part 1 - Principles and Part II - Rules. The Principles are statements expressing in general terms the ethical and professional ideals of CDA and CDS professionals, ideals they should strive to display in their professional activities. As such the Principles are intended to be a source of guidance for CDA and CDS professionals. The comments following each Principle further explain the meaning of the Principle. The Rules provide practical guidelines derived from the tenets embodied in the Principles. As such, the Rules set forth the standards of ethical and professional conduct expected to be followed in particular situations. This Code does not undertake to define standards of professional conduct of CDA and CDS professionals for purposes of civil liability.

The Code is structured so that the presentation of the Rules parallels the presentation of the Principles. For example, the Rules which relate to Principle 1 (Integrity) are numbered in the 100 to 199 series while those Rules relating to Principle 2 (Objectivity) are numbered in the 200 to 299 series.


Compliance


The IAPDA requires adherence to this Code by all those it recognizes and certifies to use its designations. Compliance with the Code, individually and by the profession as a whole, depends on each CDA and CDS professional's knowledge of and adherence to the Principles and applicable Rules, the influence of fellow professionals and public opinion, and disciplinary proceedings, when necessary, involving CDA and CDS professionals who fail to comply with the applicable provisions of the Code.


Part I - Principles
Introduction


These Principles of the Code recognize the individual CDA and CDS professional's responsibilities to the public, clients, colleagues, employers and to the profession. They apply to all CDA and CDS professionals in all aspects of their work, and provide specific guidance to them in the performance of debt settlement.

 

Principle 1: Integrity
A CDA and CDS professional shall always act with integrity.


CDA and CDS professionals may be placed by clients in positions of trust and confidence. The ultimate source of such public trust is the CDA and CDS professional's personal integrity. In deciding what is right and just, a CDA and CDS professional should rely on his or her integrity as the appropriate touchstone. Integrity demands honesty and candor that must not be subordinated to personal gain and advantage. Within the characteristic of integrity, allowance can be made for legitimate difference of opinion; but integrity cannot co-exist with deceit or subordination of one's principles. Integrity requires the CDA and CDS professional to observe not only the letter but also the spirit of this Code.

 

Principle 2: Objectivity
A CDA and CDS professional shall be objective in providing debt settlement services to clients.


Objectivity requires intellectual honesty and impartiality. It is an essential quality for any professional. Regardless of the particular service rendered or the capacity in which a CDA and CDS professional functions, a CDA and CDS professional should protect the integrity of his or her work, maintain objectivity, and avoid the subordination of his or her judgment, which would be in violation of this Code.

 

Principle 3: Competence
A CDA and CDS professional shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the CDA and CDS professional is engaged.


One is competent only when one has attained and maintained an adequate level of knowledge and skill, and applies that knowledge effectively in providing services to clients. Competence also includes the wisdom to recognize the limitations of that knowledge and when consultation or client referral is appropriate. A CDA and CDS professional, by virtue of having earned the CDA and CDS designation, is deemed to be qualified to practice debt settlement. However, in addition to assimilating the core competencies and knowledge required, and acquiring the necessary experience, a CDA and CDS professional shall make a commitment to continuous learning and professional development.

 

Principle 4: Fairness
A CDA and CDS professional shall perform debt settlement in a manner that is fair and reasonable to debtor clients, creditors, collectors, and collection attorneys and shall disclose conflicts of interest in providing such services.


Fairness requires impartiality, intellectual honesty, and disclosure of conflicts of interest. It involves a subordination of one's own feelings, prejudices, and desires so as to achieve a proper balance of conflicting interests. Fairness is treating others in the same fashion that one would want to be treated and is an essential trait of any professional.

 

Principle 5: Confidentiality
A CDA and CDS professional shall maintain confidentiality of all client information.


A client, by seeking the services of a CDA and CDS professional, expects to develop a relationship of personal trust and confidence. This type of relationship must be built upon the understanding that information supplied to the CDA and CDS professional will be confidential. In order to provide debt settlement effectively and to protect the client's privacy, the CDA and CDS professional shall safeguard the confidentiality of such information.

 

Principle 6: Professionalism
A CDA and CDS professional's conduct in all matters shall reflect credit upon the profession.


A CDA and CDS professional shall behave in a manner that maintains the good reputation of the profession and its ability to serve the public interest. A CDA and CDS professional shall avoid activities that adversely affect the quality of his or her debt settlement advice.

 

Principle 7: Diligence
A CDA and CDS professional shall act diligently in providing debt settlement.


Diligence is the provision of services in a prompt and thorough manner. Diligence also includes proper planning for and supervision of the rendering of professional services.

 

Part II - Rules
Introduction
These Rules provide practical guidelines derived from the tenets embodied in the Principles. As such, the Rules set forth the standards of ethical and professionally responsible conduct expected to be followed in particular situations.

 

Principle 1: Integrity
A CDA and CDS professional shall always act with integrity.



Rule 101 - A CDA and CDS professional shall not engage in or associate with conduct involving dishonesty, fraud, deceit or misrepresentation, or knowingly make a false or misleading statement.

 

Rule 102 - A CDA and CDS professional has the following responsibilities regarding funds and/or other property of clients:

  1. A CDA and CDS professional who takes custody of any part of a client's assets for debt settlement purposes, shall do so with the care required of a fiduciary;
  2. In exercising custody of, or discretionary authority over, client funds, a CDA and CDS professional shall act only in accordance with the authority set forth in the governing legal instrument (e.g., limited power of attorney);
  3. A CDA and CDS professional shall identify and keep complete records of all funds of a client in their custody, or under the discretionary authority, of the CDA and CDS professional;
  4. Upon receiving funds of a client, a CDA and CDS professional shall promptly or as otherwise permitted by law or provided by agreement with the client, deliver to the client or third party any funds or other property that the client or third party is entitled to receive and, upon request by the client or any person duly authorized, render a full accounting regarding such funds or other property;
  5. A CDA and CDS professional shall not commingle client funds with a CDA and CDS professional's personal funds and/or other property or the funds and/or other property of a CDA and CDS professional's firm. Commingling one or more clients' funds or other property together is permitted, subject to compliance with applicable legal requirements and provided accurate records are maintained for each client's funds or other property;
  6. A CDA and CDS professional shall not use, transfer, withdraw or otherwise employ funds for his or her fees, or for any other purpose not provided for in the engagement, except when authorized in writing by the client; and
  7. A client's assets in the custody of the CDA and CDS professional shall be used only for the means intended.

Rule 103 - A CDA and CDS professional shall not solicit clients through false or misleading communications or advertisements, and for greater certainty:

  1. a CDA and CDS professional shall not make a false or misleading communication about the size, scope or areas of competence of the CDA and CDS professional's practice or of any organization with which the CDA and CDS professional is associated;
  2. a CDA and CDS professional shall not make false or misleading communications to the public or create unverifiable expectations regarding matters relating to debt settlement or competence of the CDA and CDS professional; and
  3. a CDA and CDS professional shall not give the impression that he/she is representing the views of IAPDA or any other group unless the CDA and CDS professional has been authorized to do so.

Principle 2: Objectivity
A CDA and CDS professional shall be objective in providing debt settlement to clients.



Rule 201 - A CDA and CDS professional shall exercise reasonable and prudent professional judgment in providing debt settlement.

 

Rule 202 - A CDA and CDS professional shall act in the interests of the client.

 

 

Principle 3: Competence
A CDA and CDS professional shall provide debt settlement to clients competently and maintain the necessary competence and knowledge to continue to do so in those areas in which the CDA and CDS professional is engaged.



Rule 301 - A CDA and CDS professional shall offer advice only in those areas in which the CDA and CDS professional is competent to do so. In areas where the CDA and CDS professional is not sufficiently competent, the CDA and CDS professional shall seek the counsel of qualified individuals and/or refer clients to such parties.

 

Rule 302 - A CDA and CDS professional shall abstain from intervening in the personal affairs of the client on matters outside the scope of the engagement.

 

 

Principle 4: Fairness
A CDA and CDS professional shall perform debt settlement in a manner that is fair and reasonable to debtor clients, creditors, collectors, and collection attorneys, and shall disclose conflicts of interest in providing such services.



Rule 401 - A CDA and CDS professional shall make timely written disclosure of all material information relative to the professional relationship. Written disclosures that include the following information are considered to be in compliance with this Rule:

  1. A statement indicating whether the CDA and CDS professional's compensation arrangements involve fee-for-service, % commission or any combination of the foregoing. A CDA and CDS professional shall not hold out as a fee-for-service practitioner if the CDA and CDS professional receives commissions or other forms of economic benefit from parties other than the client;
  2. The client must be informed of the basis upon which the CDA and CDS professional is compensated. To this end, the CDA and CDS professional is governed by the accepted disclosure guidelines.;
  3. A statement describing material agency or employment relationships a CDA and CDS professional (or his/her firm) has with third parties, including the nature of the compensation arrangements (if applicable).
  4. A statement identifying any conflicts of interest; and
  5. The information required by all laws and regulations applicable to the relationship in a manner complying with such.

Rule 402 - In rendering services that do not encompass debt settlement, a CDA and CDS professional shall inform the client of the scope of the services that shall be rendered and that the CDA and CDS professional is not taking on the responsibilities of a financial planner. Such understanding obtained at the start of a relationship need be updated only when the nature of the services to be performed changes.

 

Rule 403 - A CDA and CDS professional shall inform the client of changes in circumstances and material information that arise subsequent to the original engagement that may have an impact on the professional relationship or services to be rendered. Such changes include, but are not limited to:

  1. conflicts of interest;
  2. the CDA and CDS professional's business affiliation;
  3. compensation structure affecting the professional services to be rendered; and
  4. new or changed agency relationships.

Rule 404 - Where debt settlement may be compensated for on a contingency fee basis, such a fee arrangement must be disclosed in writing to the client.

 

Rule 405 - A CDA and CDS professional shall not engage in discriminatory practices as defined in applicable human rights legislation.

 

 

Principle 5: Confidentiality
A CDA and CDS professional shall maintain confidentiality of all client information.



Rule 501 - A CDA and CDS professional shall not disclose any confidential client information without the specific consent of the client unless in response to proper legal or regulatory process. A client's name shall not be disclosed to another party unless specific consent has been granted for the use of the client as a reference.

 

Rule 502 - A CDA and CDS professional is bound to professional secrecy and may not disclose confidential information revealed by reason of his or her position or profession unless required by law.

 

Rule 503 - The use of client information for personal benefit is improper, whether or not it actually causes harm to the client.

 

Rule 504 - A CDA and CDS professional shall maintain the same standards of confidentiality for employers as for clients while employed and thereafter.

 

Rule 505 - A CDA and CDS professional doing business as a partner or principal of a debt settlement firm owes to the CDA and CDS professional's partners or co-owners a responsibility to act in good faith. This includes, but is not limited to, adherence to reasonable expectations of confidentiality both while in business together and thereafter.

 

 

Principle 6: Professionalism
A CDA and CDS professional's conduct in all matters shall reflect credit upon the profession.



Rule 601 - A CDA and CDS professional shall not engage in any conduct that reflects adversely on his or her integrity or fitness as a CDA and CDS professional, upon the designations, or upon the profession.

 

Rule 602 - A CDA and CDS professional shall use the designations in compliance with the rules and regulations of IAPDA, as established and amended from time to time.

 

Rule 603 - A CDA and CDS professional who has knowledge that another CDA and CDS professional has committed a violation of this Code, which raises substantial questions as to the CDA and CDS professional's honesty, trustworthiness or fitness as a CDA and CDS professional in other respects, shall promptly inform IAPDA. This rule does not require disclosure of information or reporting based on knowledge gained as a consultant or expert witness in anticipation of or related to litigation or other dispute resolution mechanisms. For purposes of this rule, knowledge means no substantial doubt.

 

Rule 604 - A CDA and CDS professional shall not criticize another CDA and CDS professional without first submitting this criticism to the CDA and CDS professional for explanation. Where the criticism may result in a complaint being lodged with IAPDA, the CDA and CDS professional must, where required, first submit that criticism in writing to the other CDA and CDS professional for explanation. Notwithstanding this rule, a CDA and CDS professional may first submit a criticism of another CDA and CDS professional to IAPDA, should the matter be considered of such a nature that prior notice is not appropriate.

 

Rule 605 - A CDA and CDS professional who has knowledge that raises a substantial question of unprofessional, fraudulent or illegal conduct by a CDA and CDS professional or other financial professional, shall promptly inform the appropriate regulatory and/or professional disciplinary body. This rule does not require disclosure or reporting of information gained as a consultant or expert witness in anticipation of, or related to litigation or other dispute resolution mechanisms. For purposes of this Rule, knowledge means no substantial doubt.

 

Rule 606 - A CDA and CDS professional who has reason to suspect illegal conduct within the CDA and CDS professional's organization shall make timely disclosure of the available evidence to the CDA and CDS professional's immediate supervisor and/or partners or co-owners. If the CDA and CDS professional is convinced that illegal conduct exists within the CDA and CDS professional's organization, and that appropriate measures are not taken to remedy the situation, the CDA and CDS professional shall, where appropriate, alert the appropriate regulatory authorities including IAPDA in a timely manner.

 

Rule 607 - A CDA and CDS professional shall perform debt settlement in accordance with applicable laws, rules, regulations and established policies of governmental agencies or other applicable authorities including IAPDA.

 

Rule 608 - A CDA and CDS professional shall not adopt any method of obtaining or retaining clients that tends to lower the standard of dignity of the profession.

 

Rule 609 - A CDA and CDS professional shall not practice any other profession or offer to provide such additional services unless the CDA and CDS professional is qualified to practice in those fields and is licensed or registered as required by law.

 

Rule 610 - A CDA and CDS professional shall return the client's original records in a timely manner after their return has been requested by the client.

 

Rule 611 - A CDA and CDS professional shall not bring or threaten to bring a disciplinary proceeding under this Code, or report or threaten to report information to IAPDA pursuant to Rules 602 or 603 or make or threaten to make use of this Code for no substantial purpose other than to harass, maliciously injure, embarrass and/or unfairly burden another CDA and CDS professional.

 

 

Principle 7: Diligence
A CDA and CDS professional shall act diligently in providing debt settlement.



Rule 701 - A CDA and CDS professional shall enter into a client engagement only after securing sufficient information to be satisfied that the relationship is warranted by the individual's needs and objectives, and that the CDA and CDS professional has the ability to either provide the requisite competent services or to involve and supervise other professionals who can provide such services.

 

Rule 702 - A CDA and CDS professional shall make and/or implement only those recommendations that are suitable for the client.

 

Rule 703 - Consistent with the nature and scope of the engagement, a CDA and CDS professional shall carry out a reasonable investigation regarding the financial services recommended to clients. Such an investigation may be made by the CDA and CDS professional or by others provided the CDA and CDS professional acts reasonably in relying upon such investigation.

 

Rule 704 - Before ceasing to act for a client, a CDA and CDS professional shall give the client reasonable advanced notice of his or her intent and shall make sure the withdrawal will not prejudice the client.

 

Rule 705 - A CDA and CDS professional shall properly supervise subordinates with regard to their delivery of debt settlement, and shall not accept or condone conduct in violation of this Code.