(2) Security. A provision granting the rental-purchase company a security interest in any property except the rental property delivered by the rental-purchase company under the rent-to-own agreement.
(3) Repossession. A provision authorizing the 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 provided by the rental-purchase company under the rent-to-own agreement.
(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 against an agent of the rental-purchase company, or a waiver of any provision of this subchapter.
(5) Overpayment. A provision requiring periodic rental payments totaling more than the total dollar amount of all periodic rental payments necessary to acquire ownership, as disclosed in the rental-purchase agreement.
(6) Insurance. A provision requiring the lessee to purchase insurance from the rental-purchase company to insure the rental property.
(7) Attorney fees. A provision requiring the lessee to pay attorney fees.
218.638 Liability waiver. A rental-purchase company may offer a liability waiver to the lessee. The terms of the waiver shall be provided to the lessee in writing, and 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% of the periodic rental payment due under the rent-to-own agreement. The lessee shall be entitled to cancel the waiver at the end of any rental term.
218.64 Early-purchase option. An early-purchase option under a rent-to-own agreement shall permit the lessee to purchase the rental property at any time after the initial periodic rental payment for an amount determined according to the early-purchase option formula under s. 218.634 (9). As a condition of exercising the early-purchase option, the rental-purchase company may require the lessee to be current on the payments under the lessee's rent-to-own agreement or to pay any past-due rental charges and other outstanding fees that are owed.
218.642 Receipts and statements. (1) Receipts. A rental-purchase company shall provide a written receipt to a lessee for any payment made by the lessee in cash, or upon the request of the lessee, for any other type of payment.
(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 under 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 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 rent-to-own agreements or separate statements for each rent-to-own agreement, at the rental-purchase company's option.
(3) Statement due to 3rd party. 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 rent-to-own 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 rent-to-own agreement.
(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.
218.644 Price cards displayed. (1) Price cards; generally. Except as provided under sub. (2), a rental-purchase company shall display a card or tag that clearly and conspicuously states all of the following information on or next to any property displayed or offered by the rental-purchase company for rent under a rent-to-own agreement:
(a) The cash price that an individual would pay to purchase the property.
(b) The amount of the periodic rental payment and the term over which the payment must be made.
(c) The total number and total dollar amount of all periodic rental payments necessary to acquire ownership of the property under a rent-to-own agreement.
(d) Whether the property is new or used.
(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 is impractical, a rental-purchase company may make the disclosures required under sub. (1) in a catalog or list that is readily available to prospective lessees.
218.646 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 a specific item of property, the rental-purchase company shall ensure that the advertisement clearly and conspicuously states all of the following:
(a) That the transaction advertised is a rent-to-own agreement.
(b) The total number and total dollar amount of all periodic rental payments necessary to acquire ownership of the property.
(c) That the lessee does not acquire ownership of the property if the lessee fails to make all periodic rental payments or other payments necessary to acquire ownership of the property.
(2) Exception. Subsection (1) does not apply to an in-store display or to an advertisement that is published in the yellow pages of a telephone directory or in a similar directory of businesses.
218.648 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 giving to the rental-purchase company the names of prospective lessees if the earning of the rebate or discount is contingent on the occurrence of any event that takes place after the time that the individual enters into the rent-to-own agreement.
(2) Authorized referral transactions. After entering into a rent-to-own agreement, a rental-purchase company may give or offer to give a rebate or discount to the lessee under the rent-to-own agreement in consideration of the lessee giving to the rental-purchase company the names of prospective lessees. A rebate or discount under this subsection may be contingent on the occurrence of any event that takes place after the time that the names are given to the rental-purchase company.
218.65 Termination of rent-to-own agreement. The termination date of a rent-to-own agreement is the earlier of the following:
(1) The day specified in the rent-to-own agreement as the day on which the rental term ends, unless a different day has been established pursuant to the terms of the rent-to-own agreement.
(2) The date on which the lessee voluntarily surrenders the rental property.
218.652 Late payment, grace period, and late fees. (1) Late fee; generally. If a lessee fails to make a periodic rental 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. Except as provided under sub. (4), this subsection does not apply if the lessee's failure to return the 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 is due to the lessee making all periodic rental payments necessary to acquire ownership of the rental property.
(2) Grace periods. The following grace periods shall apply to periodic rental payments made with respect to a rental-purchase agreement:
(a) For an agreement that is renewed on a weekly basis, no late fee may be assessed for a periodic rental payment that is made within 2 days after the date on which the payment is due.
(b) For an agreement that is renewed for a term that is longer than one week, no late fee may be assessed for a periodic rental payment that is made within 5 days after the date on which the payment is due.
(3) Collection, recording, and limitation of late fees. Late fees are subject to all of the following limitations:
(a) A late fee may not exceed $5 for each past-due periodic rental payment.
(b) A late fee may be collected only once on each periodic rental payment due, regardless of how long the payment remains past due.
(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.
(d) A late fee may be collected at the time that the late fee accrues or at any time afterward.
(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.
218.654 Reinstatement of terminated rent-to-own agreement. (1) Reinstatement, generally. A lessee may reinstate a terminated rent-to-own agreement without losing any rights or options previously acquired if all of the following conditions apply:
(a) The lessee returned or surrendered the rental property within 5 days after the termination of the rent-to-own agreement.
(b) Not more than 21 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 periodic rental payments necessary to acquire ownership of the rental property, not more than 45 days have passed since the date on which the rental property was returned to the rental-purchase company.
(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 periodic rental payment for the next term.
(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 rent-to-own agreement, but repossession efforts do not affect the lessee's right to reinstate the rent-to-own agreement as long as the rental property is voluntarily returned or surrendered within 5 days after the termination of the rent-to-own agreement.
(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 rental property of comparable quality and condition.
218.656 Reduced periodic rental payment due to reduced income. (1) Reduction in amount of periodic rental payments; required evidence. (a) Reduction in amount of periodic rental payments. If a lessee's monthly income is reduced by 25% or more due to pregnancy, disability, involuntary job loss, or involuntary reduction in the amount of hours worked or wages earned, the rental-purchase company shall reduce the amount of each periodic rental payment due under the rent-to-own agreement by the same percentage that the lessee's monthly income is reduced or by 50%, whichever is less, for the period of time during which the lessee's income is reduced. This paragraph applies only if all of the following conditions are satisfied:
1. The total dollar amount of periodic rental payments made by the lessee under the rent-to-own agreement equals more than 50% of the total dollar amount of periodic rental payments necessary to acquire ownership of the rental property.
2. The lessee has provided the rental-purchase company with reasonable evidence of the amount and cause of the reduction in the lessee's monthly income.
(b) Evidence of continued reduction in income. At reasonable intervals after reducing the amount of a periodic rental payment under par. (a), a rental-purchase company may require the lessee to provide evidence of the lessee's monthly income and evidence that the cause of the reduction in the lessee's monthly income has not abated.
(2) Increase in number of periodic rental payments. Except as provided in sub. (4), if a rental-purchase company reduces the amount of a periodic rental payment under sub. (1) (a), the rental-purchase company may increase the total number of periodic rental payments necessary to acquire ownership of the rental property.
(3) Increase in amount of periodic rental payments. Except as provided in sub. (4), if a rental-purchase company reduces the amount of a periodic rental payment under sub. (1) (a) and if, subsequently, the lessee's monthly income is increased, the rental-purchase company may increase, by the same percentage that the lessee's monthly income is increased, the amount of each periodic rental payment due after the date on which the lessee's monthly income is increased.
(4) Limitation on increases. If a rental-purchase company, under sub. (2) or (3), increases the amount or number of periodic rental payments due under a rent-to-own agreement, the increase affects only the rights or duties of the lessee to the extent authorized in sub. (2) or (3). No rental-purchase company, acting under sub. (2) or (3), may increase the total dollar amount of periodic rental payments necessary to acquire ownership of the rental property, or the amount of a periodic rental payment, to greater than the amount disclosed in the rent-to-own agreement.
218.658 Default and right to cure. (1) Default; generally. A lessee is in default under a rent-to-own agreement if any of the following occurs:
(a) The lessee fails to return the rental property within 7 days after the date on which the last term for which a periodic rental payment was made expires, unless the lessee has exercised an early-purchase option or has made all periodic rental payments necessary to acquire ownership of the rental property.
(b) The lessee materially breaches any other provision of the rent-to-own agreement.
(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 upon default and the expiration of any applicable period of time allowed for cure of the default.
(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 will have the right to bring an action against the lessee.
(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 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:
(a) The lessee was in default.
(b) The rental-purchase company gave the lessee written notice of the default and of the lessee's right to cure under sub. (3).
(c) The lessee cured the default.
(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. 218.66.
218.66 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:
(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.
(2) Criminal prosecution. Threaten criminal prosecution. It is not a violation of this subsection for a rental-purchase company to inform a lessee of the existence of s. 943.20 (1) (e) and the consequences of violating that section.
(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.
(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. 218.68. 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.
(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 any of the following:
(a) The disclosure to another person of information permitted to be disclosed to that person by statute.
(b) An inquiry solely for the purpose of determining the location of the lessee or the rental property.
(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.
(7) Harassment. Communicate with the lessee or a person related to the lessee with such frequency, 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.
(8) Use of obscene or threatening language. Use obscene or threatening language in communicating with the lessee or a person related to the lessee.
(9) Use of threat to enforce false right. Threaten to enforce a right with knowledge that the right does not exist.
(10) 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.
(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.
218.68 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.
218.682 Penalties. (1)
Failure to pay fees and provide reports, information, and notices; generally. A licensee that fails to file its annual report by the date specified in s. 218.628 (1), fails to pay the annual license fee by the date specified in s. 218.622 (4), fails to provide any required rider or endorsement to increase the amount of its bond by the date specified in s. 218.622 (4), fails to provide examination records by the date required by the division, fails to notify the division in writing of a relocation of the licensee's place of business by the date specified in s. 218.626 (1), or fails to provide notice to the division of other changes as required under s. 218.626 (2) by the date specified in s. 218.626 (2) may be required to forfeit not more than $50. Each day that a failure described in this subsection continues constitutes a separate offense.
(2) Failure to provide certain information. A licensee that fails to provide any additional information, data, or records requested by the division under s. 218.626 (2) by the date specified in s. 218.626 (2) may be required to forfeit not more than $100. Each day that a failure described in this subsection continues constitutes a separate offense.
(3) Misdemeanors. Any person who violates s. 218.63 (2) or any provision of ss. 218.617 to 218.628 other than those provisions described in subs. (1) and (2) may be fined not more than $1,000, imprisoned for not more than 6 months, or both.
218.684 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 subchapter is liable to a lessee damaged as a result of that violation for the costs of the action and, notwithstanding s. 814.04 (1), for reasonable attorney fees as determined by the court, plus an amount equal to the greater of the following:
(a) The actual damages, including any incidental and consequential damages, sustained by the lessee as a result of the violation.
(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.
(2) Liability; certain violations. Except as provided in subs. (4) and (5), if a rental-purchase company violates s. 218.636, 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 rent-to-own agreement.
(3) Class action. In the case of a class action, a rental-purchase company that violates this subchapter 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. 814.04 (1), 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.
(4) Defense; error notification and correction. A rental-purchase company is not liable for a violation of this subchapter 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.
(5) Defense; unintentional error. A rental-purchase company is not liable for a violation of this subchapter 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 to computer programming, or a printing error.
(6) Liability for multiple violations. Multiple violations of this subchapter in connection with the same rent-to-own agreement shall entitle the lessee to only a single recovery under sub. (1), except that a violation of s. 218.66 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).
(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).
218.686 Limitation on actions. An action brought by a lessee under this subchapter 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.
