(a) The director may issue a citation to the service contractor for any of the following reasons:

1. (1) Violation of subdivision (a) of Section 9855.3 or Section 9855.5, or any regulation adopted thereunder.
2. (2) Upon a determination by the director that the service contractor has committed a violation by (A) making or authorizing statements or advertisements which are untrue or misleading; or (B) making false promises of a character likely to influence, persuade, or induce a customer to purchase a service contract as provided by this chapter.
3. (3) For purposes of this section, a violation consists of a single publication or single course of conduct that is determined by the director to be untrue or misleading.

(b) The citation may contain an order of abatement and an order to pay an administrative fine assessed by the director.

1. (1) Each citation shall be in writing and shall describe with particularity the nature of the violation, including a specific reference to the provision of law determined to have been violated.
2. (2) Where appropriate, the citation shall contain an order of abatement fixing a reasonable time for abatement of the violation.
3. (3) A citation or fine assessment issued pursuant to a citation shall inform the service contractor that if he or she desires a hearing to contest the finding of a violation, that hearing shall be requested by written notice to the bureau within 30 days of the date of issuance of the citation or assessment. If a hearing is not requested pursuant to this section, payment of any fine shall not constitute an admission of the violation charged. Hearings shall be held pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

4. (4)

   1. (A) In addition to requesting a hearing as provided for herein, the service contractor may request a citation review conference with the director or his or her designee regarding the acts charged in the citation. A citation review conference shall be requested by written notice to the bureau within 20 days of the date of the issuance of the citation or assessment.
   2. (B) The director or his or her designee shall hold a citation review conference within 60 days from the receipt of the request. At the conclusion of the citation review conference, the director or his or her designee shall state, in writing, the reasons for his or her action and transmit a copy of his or her findings and decision to the service contractor.
5. (5) The failure of a service contractor to pay a fine within 30 days of the date of assessment, unless the citation is being appealed, may result in disciplinary action being taken by the director. Where a citation is not contested and a fine is not paid, the full amount of the assessed fine shall be added to the fee for renewal of the registration. A registration shall not be renewed without payment of the renewal fee and fine.

(c) Where a citation includes an administrative fine, it shall be issued in accordance with the following procedures:

1. (1) For the first citation, the director may assess an administrative fine of not less than one hundred dollars ($100) but not more than five hundred dollars ($500).
2. (2) For the second citation issued during any one-year period, the director may assess an administrative fine of not less than five hundred dollars ($500) but not more than one thousand dollars ($1,000).
3. (3) For the third citation issued during any two-year period, the director may assess an administrative fine of not less than one thousand dollars ($1,000) but not more than two thousand dollars ($2,000).
4. (4) For the fourth violation of subdivision (a) of Section 9855.3 or of Section 9855.5, or any regulation adopted thereunder, during any two-year period, the director may either assess an administrative fine of not less than one thousand dollars ($1,000) but not more than two thousand dollars ($2,000) or suspend, revoke, or place on probation a registration of the service contractor.