AB849: Bill Text

AB849,25,8 435.605 Rental-purchase company collection practices. In attempting to recover possession of rental property or to collect past-due periodic rental payments or other charges owed under a rent-to-own agreement, a rental-purchase company may not do any of the following:

AB849,25,10 (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.

AB849,25,15 (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.

AB849,25,18 (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.

AB849,25,25 (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 under s. 435.606. 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.

AB849,26,3 (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.

AB849,26,8 (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 that can reasonably be expected to threaten or harass the lessee or a person related to the lessee.

AB849,26,10 (7) Use of obscene or threatening language. Use obscene or threatening language in communicating with the lessee or a person related to the lessee.

AB849,26,12 (8) Use of threat to enforce false right. Threaten to enforce a right with knowledge that the right does not exist.

AB849,26,15 (9) Use of false process. Use a communication that 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.

AB849,26,19 (10) 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.

AB849,26,23 435.606 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 rent-to-own agreement unless the assignment is revocable at will by the individual.

AB849,27,3 subchapter Vii remedies, defenses and limitations

AB849,27,8 435.701 Civil actions and defenses. (1) Liability; generally. Except as provided under subs. (2) to (6), 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, notwithstanding s. 814.01 (4), for reasonable attorney fees as determined by the court, plus an amount equal to the greater of the following:

AB849,27,10 (a) The actual damages, including any incidental and consequential damages, sustained by the lessee as a result of the violation.

AB849,27,13 (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.

AB849,27,18 (2) Liability; certain violations. Except as provided in subs. (4) and (5), if a rental-purchase company violates s. 435.403, the lessee may retain the rental property under the rent-to-own agreement without obligation to pay any amount and may recover any amounts paid to the rental-purchase company under the transaction.

AB849,28,5 (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 under sub. (1) (b) may not exceed $100,000 plus the costs of the action and, notwithstanding s. 814.01 (4), 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 the members of the class, the frequency and persistence of the 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.

AB849,28,10 (4) Defense; error notification and correction. A rental-purchase company is not liable for a violation of this chapter resulting from an error by the rental-purchase company if, within 60 days after discovering the error, the rental-purchase company notifies the lessee of the error and makes any adjustments necessary to correct the error.

AB849,28,18 (5) Defense; unintentional error. A rental-purchase company is not liable for a violation of this chapter if the rental-purchase company shows by a preponderance of the evidence that the violation was not intentional, that the violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid the error and that the rental-purchase company has acted to correct the error. A bona fide error under this subsection includes a clerical error, an error in making calculations, an error due to computer malfunction or computer programming or a printing error.

AB849,28,23 (6) Liability for multiple violations. Multiple violations of this chapter in connection with the same rent-to-own agreement shall only entitle the lessee to a single recovery under sub. (1), except that a violation of s. 435.605 that occurs after recovery has been granted with respect to that rent-to-own agreement may entitle the lessee to an additional recovery under sub. (1).

AB849,29,2 (7) Necessary parties. If more than one lessee is a party to the same rent-to-own agreement, all of the lessees that are parties to the rent-to-own agreement shall be joined as plaintiffs in any action under sub. (1) and the lessees are entitled to only a single recovery under sub. (1).

AB849,29,7 435.702 Limitation on actions. An action brought by a lessee under this chapter shall be commenced within one year after the date on which the alleged violation occurred, 2 years after the date on which the rent-to-own agreement was entered into or one year after the date on which the last payment was made under the rent-to-own agreement, whichever is later.

AB849, s. 4 Section 4. Nonstatutory provisions.

AB849,29,14 (1) Submission of proposed rules governing registration of rental-purchase companies. No later than the first day of the 3rd month beginning after publication, the department of financial institutions shall submit in proposed form the rules governing registration of rental-purchase companies under section 435.301 (2) of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes.

AB849, s. 5 Section 5 . Initial applicability.

AB849,29,19 (1) Rent-to-own agreements. The treatment of sections 409.104 (12m), 421.202 (7m), 435.102 to 435.201, 435.401 to 435.403 and 435.405 to 435.701 of the statutes first applies to rent-to-own agreements entered into on the effective date of this subsection.

AB849,29,21 (2) Liability waivers. The treatment of section 435.404 of the statutes first applies to liability waivers entered into on the effective date of this subsection.

AB849,29,24 (3) Registration of rental-purchase companies. The treatment of sections 435.301 to 435.304 of the statutes first applies to any person engaging in business as a rental-purchase company on the effective date of this subsection.

AB849, s. 6 Section 6. Effective dates. This act takes effect on the day after publication, except as follows:

AB849,30,5 (1) Rent-to-own agreements. The treatment of sections 409.104 (12m) and 421.202 (7m) and chapter 435 of the statutes and Section 5 (1 ), (2) and (3) of this act take effect on the first day of the 6th month beginning after publication.

AB849,30,6 (End)