AB898: Bill Text

AB898,24,12 (17) Optional services. Space for a specific, separately signed, affirmative written indication of the lessee's desire for any optional service for which a charge is assessed. The lessee's request must be obtained after a written disclosure of the cost of the optional service is made, and the cost and term of such service must be listed at or near the signature space.

AB898,24,14 430.503 Prohibited provisions of rental-purchase agreements. A rental-purchase agreement may not contain any of the following:

AB898,24,15 (1) Confession. A confession of judgment.

AB898,24,18 (2) Security. A provision granting the rental-purchase company a security interest in any property, except rental property delivered by the rental-purchase company under the rental-purchase agreement.

AB898,24,23 (3) Repossession. A provision authorizing a rental-purchase company, or an agent of the rental-purchase company, to enter the lessee's premises without the lessee's contemporaneous permission, or to commit a breach of the peace in the repossession of rental property provided by the rental-purchase company under the rental-purchase agreement.

AB898,25,3 (4) Waiver. A waiver of a defense or counterclaim, a waiver of any right to assert any claim that the lessee may have against the rental-purchase company or an agent of the rental-purchase company, or a waiver of any provision of this chapter.

AB898,25,6 (5) Overpayment. A provision requiring rental payments totaling more than the total dollar amount of all rental payments necessary to acquire ownership, as disclosed in the rental-purchase agreement.

AB898,25,8 (6) Insurance. A provision requiring the lessee to purchase insurance from the rental-purchase company to insure the rental property.

AB898,25,9 (7) Attorney fees. A provision requiring the lessee to pay any attorney fees.

AB898,25,16 430.504 Liability waiver. A rental-purchase company may offer a liability waiver to the lessee. The terms of the waiver must be provided to the lessee in writing, incorporated into the rental-purchase agreement or on a separate document. The face of the writing shall clearly disclose that the lessee is not required to purchase the waiver. The fee for the waiver may not exceed 10 percent of the rental payment due under the rental-purchase agreement. The lessee shall be entitled to cancel the waiver at the end of any rental term.

AB898,25,20 430.505 Lessee's right to acquire ownership. (1) Limits on cost of rental services. The total amount charged by the rental-purchase company for the cost of rental services in a rental-purchase transaction shall not exceed the cash price of the property.

AB898,26,2 (2) Acquisition of ownership. At any time after the initial rental period, a lessee may acquire ownership of the property that is the subject of the rental-purchase agreement by tendering an amount equal to the original cash price of the rented property, minus at least 50 percent of all rental payments made by the lessee. A rental-purchase company may also require the lessee to pay any accrued unpaid rental payments and fees.

AB898,26,7 430.506 Unconscionable conduct. The administrator shall promulgate rules declaring specific conduct in rental-purchase agreements and the collection of accounts and property arising therefrom to be unconscionable and prohibiting the use thereof. In promulgating such rules, the administrator shall consider, among other things:

AB898,26,9 (1) That the practice unfairly takes advantage of the lack of knowledge, ability, experience, or capacity of lessees.

AB898,26,11 (2) That those engaging in the practice know of the inability of lessees to receive benefits properly anticipated from the goods or services involved.

AB898,26,15 (3) The fact that the practice may enable rental-purchase companies to take advantage of the inability of lessees reasonably to protect their interests by reason of physical or mental infirmities, illiteracy, or inability to understand the language of the agreement, ignorance or lack of education, or similar factors.

AB898,26,16 (4) That the terms of the transaction require lessees to waive legal rights.

AB898,26,19 (5) That the terms of the transaction require lessees to unreasonably jeopardize money or property beyond the money or property immediately at issue in the transaction.

AB898,26,22 (6) That the natural effect of the practice is to cause or aid in causing lessees to misunderstand the true nature of the transaction or their rights and duties thereunder.

AB898,26,24 (7) That the writing purporting to evidence the obligation of the lessees in the transaction contains terms or provisions or authorizes practices prohibited by law.

AB898,27,2 (8) Definitions of unconscionability in statutes, rules, rulings and decisions of legislative, administrative, or judicial bodies.

AB898,27,5 430.507 Receipts and statements. (1) Receipts. A rental-purchase company shall provide a written receipt to the lessee for any payment made by the lessee in cash or, upon the request of the lessee, for any other type of payment.

AB898,27,14 (2) Statement due to lessee. Subject to sub. (4), upon the request of a lessee, a rental-purchase company shall provide a written statement to the lessee showing the lessee's payment history on each rental-purchase agreement between the lessee and the rental-purchase company. A rental-purchase company is not required to provide a statement covering any rental-purchase agreement that was terminated more than one year prior to the date of the lessee's request. A rental-purchase company may provide a single statement covering all rental-purchase agreements or separate statements for each rental-purchase agreement, at the rental-purchase company's option.

AB898,27,19 (3) Statement due to other parties. Subject to sub. (4), upon the written request of a lessee, made during the term of or no later than one year after the termination of a rental-purchase agreement, a rental-purchase company shall provide a written statement to any person designated by the lessee, showing the lessee's payment history under the rental-purchase agreement.

AB898,27,24 (4) Fee for statement. A lessee or, if appropriate, a lessee's designee, is entitled to receive one statement under subs. (2) and (3) without charge once every 12 months. A rental-purchase company shall provide an additional statement if the lessee pays the rental-purchase company's reasonable costs of preparing and furnishing the statement.

AB898,27,25 Subchapter VI

AB898,28,2 Advertising, price cards, and referral transactions

AB898,28,6 430.601 Advertising. (1) Disclosure required. Except as provided under sub. (2), if an advertisement for a rental-purchase agreement refers to or states the amount of a payment for a specific item of property, the advertisement shall also clearly and conspicuously state all of the following:

AB898,28,7 (a) That the transaction advertised is a rental-purchase agreement.

AB898,28,9 (b) The total number and total dollar amount of all rental payments necessary to acquire ownership of the property.

AB898,28,12 (c) That the lessee does not acquire ownership of the property if the lessee fails to make all rental payments or other payments necessary to acquire ownership of the property.

AB898,28,15 (2) Exception. Subsection (1) does not apply to any in-store display or any advertisement that is published in the yellow pages of a telephone directory or in any similar directory of businesses.

AB898,28,19 430.602 Price cards displayed. (1) Price cards generally. Except as provided in sub. (2), a card or tag that clearly and conspicuously states all of the following shall be displayed on or next to any property displayed or offered by a rental-purchase company for rent under a rental-purchase agreement:

AB898,28,20 (a) The cash price that a lessee would pay to purchase the property.

AB898,28,21 (b) The amount and timing of the rental payments.

AB898,28,23 (c) The total number and total amount of all rental payments necessary to acquire ownership of the property under a rental-purchase agreement.

AB898,28,24 (d) The cost of rental services under a rental-purchase agreement.

AB898,28,25 (e) Whether the property is new or used.

AB898,29,5 (2) Exceptions. If property is offered for rent under a rental-purchase agreement through a catalog, or if the size of the property is such that displaying a card or tag on or next to the property would be impractical, a rental-purchase company may make the disclosures required under sub. (1) in a catalog or list, if the catalog or list is readily available to prospective lessees.

AB898,29,12 430.603 Referral transactions. (1) Prohibited referral transactions. No rental-purchase company may induce any individual to enter into a rental-purchase agreement by giving or offering to give a rebate or discount to the individual in consideration of the individual's giving to the rental-purchase company the names of prospective lessees if the earning of the rebate or discount is contingent upon the occurrence of any event that takes place after the time that the individual enters into the rental-purchase agreement.

AB898,29,19 (2) Authorized referral transactions. After entering into a rental-purchase agreement, a rental-purchase company may give or offer to give a rebate or discount to a lessee under the rental-purchase agreement in consideration of the lessee's giving to the rental-purchase company the names of prospective lessees. A rebate or discount under this subsection may be contingent upon the occurrence of any event that takes place after the time that the names are given to the rental-purchase company.

AB898,29,20 Subchapter VII

AB898,29,22 Termination, reinstatement, default, and right to cure

AB898,29,24 430.701 Termination of rental-purchase agreement. The termination date of a rental-purchase agreement is the earlier of the following:

AB898,30,3 (1) The day specified in the rental-purchase agreement as the day on which the rental term ends, unless a different day has been established under the rental-purchase agreement.

AB898,30,4 (2) The date on which the lessee voluntarily surrenders the rental property.

AB898,30,14 430.702 Late payment, grace period, and late fees. (1) Late fee generally. If a lessee fails to make any payment when due under a rental-purchase agreement or if, at the end of any rental term, the lessee fails to return the rental property or to renew the rental-purchase agreement for an additional term, the rental-purchase company may require the lessee to pay a late fee. Except as provided in sub. (4), this subsection does not apply if the lessee's failure to return rental property or failure to renew the rental-purchase agreement at the end of the rental term is due to the lessee's exercise of an early-purchase option under the rental-purchase agreement or is due to the lessee's making all payments necessary to acquire ownership of the rental property.

AB898,30,16 (2) Grace periods. The following grace periods shall apply to rental payments made with respect to a rental-purchase agreement:

AB898,30,19 (a) For an agreement that is renewed on a weekly basis, no late fee may be assessed for a payment that is made within 2 days after the date on which the scheduled payment is due.

AB898,30,22 (b) For an agreement that is renewed for a term that is longer than one week, no late fee may be assessed for a payment that is made within 5 days after the date on which the scheduled payment is due.

AB898,30,24 (3) Collection, application, and limitation of late fees. Late fees are subject to all of the following:

AB898,30,25 (a) A late fee may not exceed $5 for each past-due rental payment.

AB898,31,2 (b) A late fee may be collected only once on each rental payment due, regardless of how long the payment remains past due.

AB898,31,4 (c) Payments received shall be applied first to the payment of any rent that is due and then to late fees and any other charges.

AB898,31,6 (d) A late fee may be collected at the time that the late fee accrues or at any time afterward.

AB898,31,9 (4) Effect of outstanding late fee on transfer of ownership. A rental-purchase company may require payment of any outstanding late fees before transferring ownership of rental property to a lessee.

AB898,31,13 430.703 Reinstatement of terminated rental-purchase agreement. (1) Reinstatement generally. A lessee may reinstate a terminated rental-purchase agreement without losing any rights or options previously acquired if all of the following apply:

AB898,31,15 (a) The lessee returned or surrendered the rental property within 7 days after the termination of the rental-purchase agreement.

AB898,31,20 (b) Not more than 60 days have passed after the date on which the rental property was returned to the rental-purchase company or, if the lessee has paid two-thirds or more of the total number of rental payments necessary to acquire ownership of the rental property, not more than 120 days have passed since the date on which the rental property was returned to the rental-purchase company.

AB898,31,24 (2) Authorized conditions on reinstatement. As a condition of reinstatement under this section, the rental-purchase company may require the payment of all past-due rental charges, any applicable late fees, a reinstatement fee not to exceed $5, and the rental payment for an additional term.

AB898,32,6 (3) Effect of repossession on reinstatement. Nothing in this section prohibits a rental-purchase company from attempting to repossess rental property upon termination of a rental-purchase agreement, but such efforts do not affect the lessee's right to reinstate as long as the rental property is repossessed, voluntarily returned, or surrendered within 7 days after the termination of the rental-purchase agreement.

AB898,32,11 (4) Property available upon reinstatement. Upon reinstatement, the rental-purchase company shall provide the lessee with the same rental property, if the property is available and is in the same condition as when it was returned to the rental-purchase company, or with substitute property of comparable quality and condition.

AB898,32,13 430.704 Default and right to cure. (1) Default generally. A lessee is in default under a rental-purchase agreement if any of the following applies:

AB898,32,17 (a) The lessee fails to return rental property within 7 days after the date on which the last rental term for which a rental payment was made expires, unless the lessee has exercised an early-purchase option or has made all rental payments necessary to acquire ownership of the rental property.

AB898,32,19 (b) The lessee materially breaches any other provision of the rental-purchase agreement.

AB898,32,23 (2) Default; necessary for lessee liability. No cause of action shall accrue against a lessee with respect to the lessee's obligations under a rental-purchase agreement except upon default and the expiration of any applicable period of time allowed for cure of the default.

AB898,33,5 (3) Notice of default; general requirement. Except as provided in sub. (4), as a condition precedent to bringing an action against a lessee arising out of the lessee's default, a rental-purchase company shall provide a written notice of the default and of the right to cure the default to the lessee. The notice shall specify the default and the action required to cure the default and shall inform the lessee that if the default is not cured within 15 days after the notice is given the rental-purchase company may bring an action against the lessee.

AB898,33,11 (4) Notice of default; exception. A rental-purchase company is not required to provide a notice of default and right to cure as a condition precedent to bringing an action against a lessee if the lessee breaches the agreement and, in so doing, may or does materially impair the condition, value or protection of the rental property, or otherwise if each of the following occurred twice during the 12 months before the date of the current default with respect to the same rental-purchase agreement:

AB898,33,12 (a) The lessee was in default.

AB898,33,14 (b) The rental-purchase company gave the lessee written notice of the default and of the lessee's right to cure under sub. (3).

AB898,33,15 (c) The lessee cured the default.

AB898,33,19 (5) Request for voluntary surrender of property. A rental-purchase company may request the voluntary return or surrender of rental property prior to the declaration of a default and the sending of written notice of default and right to cure. A request under this subsection is subject to s. 430.801.

AB898,33,20 Subchapter VIII

AB898,33,21 Collection practices

AB898,33,25 430.801 Rental-purchase company collection practices. In attempting to recover possession of rental property or to collect past-due rental payments or other charges owed under a rental-purchase agreement, a rental-purchase company may not do any of the following:

AB898,34,2 (1) Use of force. Use or threaten to use force or violence to cause physical harm to the lessee or the lessee's property or to a person related to the lessee.

AB898,34,3 (2) Criminal prosecution. Threaten criminal prosecution.

AB898,34,6 (3) Disclosure of false information. Disclose or threaten to disclose information adversely affecting the lessee's reputation for creditworthiness with knowledge or reason to know that the information is false.

AB898,34,13 (4) Communication with lessee's employer. Initiate or threaten to initiate communication with the lessee's employer prior to obtaining final judgment against the lessee, except for the purpose of enforcing an assignment of earnings authorized under s. 430.802. This subsection does not prohibit a rental-purchase company from communicating with a lessee's employer solely to verify employment status or earnings or to determine if the employer has an established debt counseling service or procedure.

AB898,34,20 (5) Disclosure of information relating to lessee's reputation. Disclose or threaten to disclose to a person other than the lessee or the lessee's spouse information affecting the lessee's reputation, whether or not for creditworthiness, with knowledge or reason to know that the other person does not have a legitimate business need for the information, except that this subsection does not prohibit an inquiry solely for the purpose of determining the location of the lessee or the rental property.

AB898,34,23 (6) Disclosure of information regarding a disputed debt. Disclose or threaten to disclose information concerning the existence of a debt known to be reasonably disputed by the lessee without disclosing the fact that the lessee disputes the debt.

AB898,35,3 (7) Harassment. Communicate with the lessee or a person related to the lessee with such frequency or at such unusual hours or in such a manner as can reasonably be expected to threaten or harass the lessee, or a person related to the lessee, or engage in any other conduct that can reasonably be expected to threaten or harass the lessee or a person related to the lessee.

AB898,35,5 (8) Use of obscene or threatening language. Use obscene or threatening language in communicating with the lessee or a person related to the lessee.

AB898,35,7 (9) Use of threat to enforce false legal right. Claim, attempt to claim, or threaten to enforce a legal right with knowledge that the legal right does not exist.

AB898,35,10 (10) Use of false process. Use a communication which simulates legal or judicial process or that gives the appearance of being authorized, issued, or approved by a government, government agency, or attorney-at-law when it is not.

AB898,35,14 (11) Use of threat to sue. Threaten to file a civil action against the lessee unless the civil action is of a type that the rental-purchase company files in the regular course of business or unless the rental-purchase company intends to file the civil action against the lessee.

AB898,35,18 (12) Violation of rules. Engage in false, misleading, deceptive, or unconscionable conduct in violation of a rule promulgated by the administrator after such or similar conduct has been restrained or enjoined by a court in a civil action by the administrator against any rental-purchase company.

AB898,35,22 430.802 Assignment of earnings. No rental-purchase company may take or arrange for an assignment of earnings of an individual for payment or as security for payment of an obligation arising out of a rental-purchase agreement unless the assignment is revocable at will by the individual.

AB898,35,23 Subchapter IX