Amendment AA2-ASA1-AB133

AB133-ASA1-AA2,468,1 (a) The information shall be clearly and conspicuously disclosed.

AB133-ASA1-AA2,468,2 (b) The information shall be disclosed in writing.

AB133-ASA1-AA2,468,4 (c) The information shall be disclosed on the face of the rent-to-own agreement above the line for the lessee's signature.

AB133-ASA1-AA2,468,5 (d) The information shall be disclosed in not less than 8-point standard type.

AB133-ASA1-AA2,468,7 (e) The information shall be disclosed at or before the time that the lessee becomes legally obligated under the rent-to-own agreement.

AB133-ASA1-AA2,468,11 (2) Accuracy of disclosure. All information required under s. 435.402 must be accurate as of the time that it is disclosed. If any information subsequently becomes inaccurate as a result of any act, occurrence or agreement by the lessee, the resulting inaccuracy is not a violation of this chapter.

AB133-ASA1-AA2,468,16 (3) Copy of rent-to-own agreement. The rental-purchase company shall provide the lessee with a copy of the completed rent-to-own agreement signed by the lessee. If more than one lessee is legally obligated under the same rent-to-own agreement, delivery of a copy of the completed rent-to-own agreement to one of the lessees shall satisfy this subsection.

AB133-ASA1-AA2,468,19 435.402 Required provisions of rent-to-own agreement. A rental-purchase company shall include all of the following information, to the extent applicable, in every rent-to-own agreement:

AB133-ASA1-AA2,468,24 (1) Description. A brief description of the rental property, sufficient to identify the rental property to the lessee and the rental-purchase company, including an identification number, and a statement indicating whether the rental property is new or used. A statement that incorrectly indicates that new rental property is used is not a violation of this chapter.

AB133-ASA1-AA2,469,3 (2) Cash price. The price at which the rental-purchase company would have sold the rental property to the lessee for cash on the date on which the rent-to-own agreement is executed.

AB133-ASA1-AA2,469,4 (3) Rental Payment. The periodic rental payment for the rental property.

AB133-ASA1-AA2,469,9 (4) Up-front payment. The payment required of the lessee at the time that the agreement is executed or the rental property is delivered, whichever is later, including the initial rental payment, any application or processing charge, any delivery fee, any charge for a liability damage waiver or for other optional services agreed to by the lessee, and the applicable tax.

AB133-ASA1-AA2,469,11 (5) Payment to acquire ownership. The total number, total dollar amount and due date of all rental payments necessary to acquire ownership of the rental property.

AB133-ASA1-AA2,469,17 (6) Other charges. A statement that the total dollar amount of all rental payments necessary to acquire ownership of the rental property does not include other charges that a lessee may incur, such as application, processing or delivery charges, and late payment, reinstatement, default and pickup fees. These charges shall be separately identified in the rental-purchase agreement and the amount of each charge and fee disclosed.

AB133-ASA1-AA2,469,20 (7) Rental, not purchase. A statement that the lessee will not own the rental property until the lessee has made the total amount of payments necessary to acquire ownership or has exercised the lessee's early-purchase option.

AB133-ASA1-AA2,469,25 (8) Summary of early-purchase option. A statement summarizing the terms of the lessee's option to acquire ownership of the rental property, including a statement indicating that the lessee has the right to exercise an early purchase option and indicating the price, or the formula or method for determining the price, at which the rental property may be purchased under the early-purchase option.

AB133-ASA1-AA2,470,5 (9) Responsibility for theft or damage. A statement that, unless otherwise agreed, the lessee is responsible for the fair market value of the rental property, determined according to the early-purchase option formula or method, if, and as of the time, the rental property is stolen, damaged or destroyed while in the possession of or subject to the control of the lessee.

AB133-ASA1-AA2,470,12 (10) Service and warranty. A statement identifying the party responsible for maintaining or servicing the rental property during the term of the rent-to-own agreement, together with a description of that responsibility, and a statement that if any part of a manufacturer's express warranty covers the rental property when the lessee acquires ownership of the rental property the manufacturer's express warranty will be transferred to the lessee, if the transfer is allowed by the terms of the manufacturer's express warranty.

AB133-ASA1-AA2,470,16 (11) Termination at option of lessee. A statement that the lessee may terminate the agreement at any time without penalty by voluntarily surrendering or returning the rental property in good repair along with any past-due rental payments, fees and charges.

AB133-ASA1-AA2,470,18 (12) Right to reinstate. A brief explanation of the lessee's right to reinstate a rent-to-own agreement under s. 435.405.

AB133-ASA1-AA2,470,24 (13) General notice. A notice reading substantially as follows: "You are renting this property. You will not own the property until you make all of the regularly scheduled rental payments necessary to acquire ownership or until you exercise your early-purchase option. If you do not make your rental payments as scheduled or exercise your early-purchase option, the lessor may repossess the property."

AB133-ASA1-AA2,471,4 (14) Information about rental-purchase company and lessee. The names of the rental-purchase company and the lessee, the rental-purchase company's business address and telephone number, the lessee's address and the date on which the rent-to-own agreement is executed.

AB133-ASA1-AA2,471,6 435.403 Prohibited provisions of rent-to-own agreement. A rent-to-own agreement may not contain any of the following:

AB133-ASA1-AA2,471,7 (1) Confession. A confession of judgment.

AB133-ASA1-AA2,471,10 (2) Security. A provision granting the rental-purchase company a security interest in any property except rental property delivered by the rental-purchase company pursuant to the rent-to-own agreement.

AB133-ASA1-AA2,471,14 (3) Repossession. A provision authorizing a rental-purchase company or an agent of the rental-purchase company to enter the lessee's premises or to commit a breach of the peace in the repossession of rental property delivered by the rental-purchase company pursuant to the rent-to-own agreement.

AB133-ASA1-AA2,471,17 (4) Waiver. A waiver of a defense or counterclaim, or 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.

AB133-ASA1-AA2,471,20 (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.

AB133-ASA1-AA2,471,22 (6) Insurance. A provision requiring the purchase of insurance from the rental-purchase company to cover the rental property.

AB133-ASA1-AA2,472,7 435.404 Late payment, grace period and late fees. (1) Late fee; generally. If a lessee fails to make any payment when due under a rent-to-own agreement or if, at the end of any rental term, the lessee fails to return the rental property or to renew the rent-to-own agreement for an additional term, the rental-purchase company may require the lessee to pay a late fee. However, except as provided under sub. (4), this subsection does not apply if the lessee's failure to return rental property or failure to renew the rent-to-own agreement at the end of the rental term is due to the lessee's exercise of an early-purchase option under the rent-to-own agreement or due to the lessee's making all payments necessary to acquire ownership of the rental property.

AB133-ASA1-AA2,472,9 (2) Grace periods. The following grace periods shall apply to rental payments made with respect to a rental-purchase agreement:

AB133-ASA1-AA2,472,12 (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.

AB133-ASA1-AA2,472,15 (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.

AB133-ASA1-AA2,472,17 (3) Collection, recording and limitation of late fees. Late fees are subject to all of the following limitations:

AB133-ASA1-AA2,472,18 (a) A late fee may not exceed $5 for each past-due rental payment.

AB133-ASA1-AA2,472,20 (b) A late fee may be collected only once on each rental payment due, regardless of how long the payment remains past due.

AB133-ASA1-AA2,472,22 (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.

AB133-ASA1-AA2,472,24 (d) A late fee may be collected at the time that the late fee accrues or at any time afterward.

AB133-ASA1-AA2,473,3 (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.

AB133-ASA1-AA2,473,7 435.405 Reinstatement of terminated rent-to-own agreement. (1) Reinstatement, generally. A lessee shall have the right to reinstate a terminated rent-to-own agreement without losing any rights or options previously acquired if all of the following conditions apply:

AB133-ASA1-AA2,473,9 (a) The lessee returned or surrendered the rental property within 5 days after the termination of the agreement.

AB133-ASA1-AA2,473,14 (b) Not more than 21 days have passed after the date that the rental property was returned to the rental-purchase company or, if the lessee has paid two-thirds or more of the total of rental payments necessary to acquire ownership of the rental property, not more than 45 days have passed since the date that the rental property was returned to the rental-purchase company.

AB133-ASA1-AA2,473,18 (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.

AB133-ASA1-AA2,473,23 (3) Effect of repossession on reinstatement. Nothing in this section shall prevent a rental-purchase company from attempting to repossess rental property upon termination of a rent-to-own agreement, but such efforts shall not affect the lessee's right to reinstate as long as the rental property is voluntarily returned or surrendered within 5 days after the termination of the rent-to-own agreement.

AB133-ASA1-AA2,474,3 (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.

AB133-ASA1-AA2,474,8 435.406 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 and the face of the writing must clearly disclose that the lessee is not required to purchase the waiver. The fee for the waiver may not exceed 10% of the periodic rental payment.

AB133-ASA1-AA2,474,15 435.407 Early-purchase option. A rental-purchase company shall offer an early-purchase option to every lessee who enters into a rent-to-own agreement with the rental-purchase company. The early-purchase option shall permit the lessee to purchase the rental property for cash at any time after the initial payment. As a condition of exercising the early-purchase option, the rental-purchase company may require the lessee to be current on the lessee's rent-to-own agreement or to pay any past-due rental charges and other outstanding fees that are owed.

AB133-ASA1-AA2,474,22 435.408 Referral transactions. (1) Prohibited referral transactions. No rental-purchase company may induce any individual to enter into a rent-to-own 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 rent-to-own agreement.

AB133-ASA1-AA2,475,3 (2) Authorized referral transactions. A rental-purchase company may give or offer to give a rebate or discount to a lessee who rents personal property from the rental-purchase company 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.

AB133-ASA1-AA2,475,6 435.409 Receipts and statements. (1) Receipts due upon request. Upon the request of a lessee, a rental-purchase company shall provide a written receipt to the lessee for any payment made by the lessee.

AB133-ASA1-AA2,475,15 (2) Statement due upon request. 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 rent-to-own agreement between the lessee and the rental-purchase company. A rental-purchase company is not required to provide a statement covering any rent-to-own agreement that was terminated or completed more than one year prior to the date of the lessee's request. A rental-purchase company may provide a single statement covering all rent-to-own agreements or separate statements for each rent-to-own agreement, at the rental-purchase company's option.

AB133-ASA1-AA2,475,19 435.501 Price cards displayed. (1) Price cards; generally. 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 rent-to-own agreement:

AB133-ASA1-AA2,475,20 (a) The price of the property if purchased in cash.

AB133-ASA1-AA2,475,22 (b) The amount of the periodic rental payment and the term over which the payment must be made.

AB133-ASA1-AA2,475,24 (c) The total number and total amount of rental payments that must be paid in order to acquire ownership of the property under a rent-to-own agreement.

AB133-ASA1-AA2,475,25 (d) Whether the property is new or used.

AB133-ASA1-AA2,476,5 (2) Exceptions. If property is offered for rent under a rent-to-own 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 by this section in a catalog or list, if the catalog or list is readily available to prospective lessees.

AB133-ASA1-AA2,476,10 435.502 Advertising. (1) Disclosure required. Except as provided under sub. (2), if an advertisement for a rent-to-own agreement refers to or states the amount of a payment for any property and the right to acquire ownership of that property, the advertisement shall also clearly and conspicuously state all of the following:

AB133-ASA1-AA2,476,11 (a) That the transaction advertised is a rent-to-own agreement.

AB133-ASA1-AA2,476,13 (b) The total number and total dollar amount of rental payments that must be paid to acquire ownership.

AB133-ASA1-AA2,476,15 (c) That the lessee does not acquire ownership of the property if the total dollar amount of payments necessary to acquire ownership is not paid.

AB133-ASA1-AA2,476,18 (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.

AB133-ASA1-AA2,476,22 (3) Advertiser not liable. An owner or agent of the medium in which an advertisement for a rent-to-own agreement appears or through which an advertisement for a rent-to-own agreement is disseminated shall not be liable for any violation of sub. (1).

AB133-ASA1-AA2,476,24 435.601 Default and right to cure. (1) Default; Generally. A lessee is in default under a rent-to-own agreement if any of the following applies:

AB133-ASA1-AA2,477,4 (a) The lessee fails to return rental property within 7 days after the date that 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 payments necessary to acquire ownership of the rental property.

AB133-ASA1-AA2,477,6 (b) The lessee materially breaches any other provision of the rent-to-own agreement.

AB133-ASA1-AA2,477,9 (2) Default; necessary for lessee liability. No cause of action shall accrue against a lessee with respect to the lessee's obligations under a rent-to-own agreement except by reason of a default.

AB133-ASA1-AA2,477,16 (3) Notice of default; general requirement. 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 will have the right to bring an action against the lessee.

AB133-ASA1-AA2,477,21 (4) Notice of default; exception. Notwithstanding sub. (3), 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 each of the following occurred twice during the 12 months before the date of the current default with respect to the same rent-to-own agreement:

AB133-ASA1-AA2,477,22 (a) The lessee was in default.

AB133-ASA1-AA2,477,24 (b) The rental-purchase company gave the lessee written notice of the default and of the lessee's right to cure under sub. (3).

AB133-ASA1-AA2,477,25 (c) The lessee cured the default.

AB133-ASA1-AA2,478,4 (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 the requirements of s. 435.602.

AB133-ASA1-AA2,478,8 435.602 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 rent-to-own agreement, a rental-purchase company may not do any of the following:

AB133-ASA1-AA2,478,10 (1) Use of force. Use or threaten to use force or violence to cause physical harm to the lessee or the lessee's dependents or property.

AB133-ASA1-AA2,478,15 (2) Criminal prosecution. Threaten criminal prosecution, unless the rental-purchase company reasonably believes, in good faith, that the lessee has violated a law of this state and, as a result of the violation, is subject to penalties including a fine or imprisonment or both and the rental-purchase company intends to seek the filing of criminal charges against the lessee.

AB133-ASA1-AA2,478,18 (3) Disclosure of false information. Disclose or threaten to disclose information adversely affecting the lessee's reputation for credit worthiness with knowledge or reason to know that the information is false.

AB133-ASA1-AA2,478,24 (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 as permitted by statute, including specifically s. 422.404. 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.

AB133-ASA1-AA2,479,3 (5) 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.

AB133-ASA1-AA2,479,8 (6) 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 engage in any other conduct which can reasonably be expected to threaten or harass the lessee or a person related to the lessee.

AB133-ASA1-AA2,479,10 (7) Use of obscene or threatening language. Use obscene or threatening language in communicating with the lessee or a person related to the lessee.

AB133-ASA1-AA2,479,12 (8) Use of threat to enforce false right. Threaten to enforce a right with knowledge that the right does not exist.

AB133-ASA1-AA2,479,15 (9) Use of false process. Use a communication which simulates legal or judicial process or which gives the appearance of being authorized, issued or approved by a government, government agency or attorney-at-law when it is not.

AB133-ASA1-AA2,479,18 (10) Use of threat to sue. Threaten to file a civil action against the lessee unless such action is taken in the regular course of business or is intended with respect to the lessee in question.

AB133-ASA1-AA2,479,23 435.701 Civil actions and defenses. (1) Liability; generally. Except as provided under sub. (2), a a rental-purchase company that violates any provision of this chapter is liable to a lessee damaged as a result of that violation for the costs of the action and for reasonable attorney fees as determined by the court, plus an amount equal to the greater of the following:

AB133-ASA1-AA2,479,25 (a) The actual damages, including any incidental and consequential damages, sustained by the lessee as a result of the violation.

AB133-ASA1-AA2,480,3 (b) An amount equal to 25% of the total amount of payments due in one month under the lessee's rent-to-own agreement, except that liability under this paragraph may not be less than $100 nor more than $1,000.

AB133-ASA1-AA2,480,7 (2) Liability; certain violations. If a rent-to-own agreement violates s. 435.403, the lessee shall be entitled to retain the rental property without obligation to pay any amount and to recover any sums paid to the rental-purchase company pursuant to the transaction.

AB133-ASA1-AA2,480,18 (3) Class action. In the case of a class action, a rental-purchase company that violates this chapter is liable to the members of the class in an amount determined by the court, except that the total recovery for all lessees whose recovery is computed pursuant to sub. (1) (b) may not exceed $100,000 plus the costs of the action and reasonable attorney fees as determined by the court. In determining the amount to award under this subsection, the court shall consider, among other relevant factors, the amount of actual damages sustained by members of the class, the frequency and persistence of violations by the rental-purchase company, the resources of the rental-purchase company, the number of persons damaged by the violation, the presence or absence of good faith on the part of the rental-purchase company, and the extent to which the violation was intentional.