AB898-ASA2,14,3
22422.605 Liability waiver. A rental-purchase company may offer a liability
23waiver to the lessee. The terms of the waiver must be provided to the lessee in
24writing, incorporated into the rental-purchase agreement or on a separate
25document. The face of the writing shall clearly disclose that the lessee is not required
1to purchase the waiver. The fee for the waiver may not exceed 10 percent of the rental
2payment due under the rental-purchase agreement. The lessee shall be entitled to
3cancel the waiver at the end of any rental term.
AB898-ASA2,14,7
4422.606 Lessee's right to acquire ownership. (1) Limits on cash prices. 5The cash price for rental property may not exceed an amount equal to twice the actual
6purchase price of the rental property, including any applicable freight charges, paid
7by the rental-purchase company to a manufacturer or wholesaler.
AB898-ASA2,14,10
8(2) Limits on cost of rental services. The total amount charged by the
9rental-purchase company for the cost of rental services in a rental-purchase
10transaction shall not exceed the cash price of the property.
AB898-ASA2,14,18
11(3) Acquisition of ownership. At any time after the initial rental period, a
12lessee may acquire ownership of the property that is the subject of the
13rental-purchase agreement by tendering an amount not to exceed an amount equal
14to the cash price of the rental property multiplied by a fraction that has as its
15numerator the number of periodic rental payments remaining under the
16rental-purchase agreement and that has as its denominator the total number of
17periodic rental payments. A rental-purchase company may also require the lessee
18to pay any accrued unpaid rental payments and fees.
AB898-ASA2,14,23
19422.607 Unconscionable conduct. The administrator of the division of
20banking in the department of financial institutions shall promulgate rules declaring
21specific conduct in rental-purchase agreements and the collection of accounts and
22property arising therefrom to be unconscionable and prohibiting the use thereof. In
23promulgating such rules, the administrator shall consider, among other things:
AB898-ASA2,14,25
24(1) That the practice unfairly takes advantage of the lack of knowledge, ability,
25experience, or capacity of lessees.
AB898-ASA2,15,2
1(2) That those engaging in the practice know of the inability of lessees to receive
2benefits properly anticipated from the goods or services involved.
AB898-ASA2,15,6
3(3) The fact that the practice may enable rental-purchase companies to take
4advantage of the inability of lessees reasonably to protect their interests by reason
5of physical or mental infirmities, illiteracy, or inability to understand the language
6of the agreement, ignorance or lack of education, or similar factors.
AB898-ASA2,15,7
7(4) That the terms of the transaction require lessees to waive legal rights.
AB898-ASA2,15,10
8(5) That the terms of the transaction require lessees to unreasonably
9jeopardize money or property beyond the money or property immediately at issue in
10the transaction.
AB898-ASA2,15,13
11(6) That the natural effect of the practice is to cause or aid in causing lessees
12to misunderstand the true nature of the transaction or their rights and duties
13thereunder.
AB898-ASA2,15,15
14(7) That the writing purporting to evidence the obligation of the lessees in the
15transaction contains terms or provisions or authorizes practices prohibited by law.
AB898-ASA2,15,17
16(8) Definitions of unconscionability in statutes, rules, rulings and decisions of
17legislative, administrative, or judicial bodies.
AB898-ASA2,15,20
18422.608 Receipts and statements. (1) Receipts. A rental-purchase
19company shall provide a written receipt to the lessee for any payment made by the
20lessee in cash or, upon the request of the lessee, for any other type of payment.
AB898-ASA2,16,4
21(2) Statement due to lessee. Subject to sub. (4), upon the request of a lessee,
22a rental-purchase company shall provide a written statement to the lessee showing
23the lessee's payment history on each rental-purchase agreement between the lessee
24and the rental-purchase company. A rental-purchase company is not required to
25provide a statement covering any rental-purchase agreement that was terminated
1more than one year prior to the date of the lessee's request. A rental-purchase
2company may provide a single statement covering all rental-purchase agreements
3or separate statements for each rental-purchase agreement, at the rental-purchase
4company's option.
AB898-ASA2,16,9
5(3) Statement due to other parties. Subject to sub. (4), upon the written
6request of a lessee, made during the term of or no later than one year after the
7termination of a rental-purchase agreement, a rental-purchase company shall
8provide a written statement to any person designated by the lessee, showing the
9lessee's payment history under the rental-purchase agreement.
AB898-ASA2,16,14
10(4) Fee for statement. A lessee or, if appropriate, a lessee's designee, is entitled
11to receive one statement under subs. (2) and (3) without charge once every 12
12months. A rental-purchase company shall provide an additional statement if the
13lessee pays the rental-purchase company's reasonable costs of preparing and
14furnishing the statement.
AB898-ASA2,16,18
15422.610 Advertising. (1) Disclosure required. Except as provided under
16sub. (2), if an advertisement for a rental-purchase agreement refers to or states the
17amount of a payment for a specific item of property, the advertisement shall also
18clearly and conspicuously state all of the following:
AB898-ASA2,16,1919
(a) That the transaction advertised is a rental-purchase agreement.
AB898-ASA2,16,2120
(b) The total number and total dollar amount of all rental payments necessary
21to acquire ownership of the property.
AB898-ASA2,16,2422
(c) That the lessee does not acquire ownership of the property if the lessee fails
23to make all rental payments or other payments necessary to acquire ownership of the
24property.
AB898-ASA2,17,3
1(2) Exception. Subsection (1) does not apply to any in-store display or any
2advertisement that is published in the yellow pages of a telephone directory or in any
3similar directory of businesses.
AB898-ASA2,17,7
4422.611 Price cards displayed. (1) Price cards generally. Except as
5provided in sub. (2), a card or tag that clearly and conspicuously states all of the
6following shall be displayed on or next to any property displayed or offered by a
7rental-purchase company for rent under a rental-purchase agreement:
AB898-ASA2,17,88
(a) The cash price that a lessee would pay to purchase the property.
AB898-ASA2,17,99
(b) The amount and timing of the rental payments.
AB898-ASA2,17,1110
(c) The total number and total amount of all rental payments necessary to
11acquire ownership of the property under a rental-purchase agreement.
AB898-ASA2,17,1212
(d) The cost of rental services under a rental-purchase agreement.
AB898-ASA2,17,1313
(e) Whether the property is new or used.
AB898-ASA2,17,18
14(2) Exceptions. If property is offered for rent under a rental-purchase
15agreement through a catalog, or if the size of the property is such that displaying a
16card or tag on or next to the property would be impractical, a rental-purchase
17company may make the disclosures required under sub. (1) in a catalog or list, if the
18catalog or list is readily available to prospective lessees.
AB898-ASA2,17,25
19422.612 Referral transactions. (1) Prohibited referral transactions. No
20rental-purchase company may induce any individual to enter into a rental-purchase
21agreement by giving or offering to give a rebate or discount to the individual in
22consideration of the individual's giving to the rental-purchase company the names
23of prospective lessees if the earning of the rebate or discount is contingent upon the
24occurrence of any event that takes place after the time that the individual enters into
25the rental-purchase agreement.
AB898-ASA2,18,7
1(2) Authorized referral transactions. After entering into a rental-purchase
2agreement, a rental-purchase company may give or offer to give a rebate or discount
3to a lessee under the rental-purchase agreement in consideration of the lessee's
4giving to the rental-purchase company the names of prospective lessees. A rebate
5or discount under this subsection may be contingent upon the occurrence of any event
6that takes place after the time that the names are given to the rental-purchase
7company.
AB898-ASA2,18,9
8422.613 Termination of rental-purchase agreement. The termination
9date of a rental-purchase agreement is the earlier of the following:
AB898-ASA2,18,12
10(1) The day specified in the rental-purchase agreement as the day on which
11the rental term ends, unless a different day has been established under the
12rental-purchase agreement.
AB898-ASA2,18,13
13(2) The date on which the lessee voluntarily surrenders the rental property.
AB898-ASA2,18,23
14422.614 Late payment, grace period, and late fees. (1) Late fee
15generally. If a lessee fails to make any payment when due under a rental-purchase
16agreement or if, at the end of any rental term, the lessee fails to return the rental
17property or to renew the rental-purchase agreement for an additional term, the
18rental-purchase company may require the lessee to pay a late fee. Except as
19provided in sub. (4), this subsection does not apply if the lessee's failure to return
20rental property or failure to renew the rental-purchase agreement at the end of the
21rental term is due to the lessee's exercise of an early-purchase option under the
22rental-purchase agreement or is due to the lessee's making all payments necessary
23to acquire ownership of the rental property.
AB898-ASA2,18,25
24(2) Grace periods. The following grace periods shall apply to rental payments
25made with respect to a rental-purchase agreement:
AB898-ASA2,19,3
1(a) For an agreement that is renewed on a weekly basis, no late fee may be
2assessed for a payment that is made within 2 days after the date on which the
3scheduled payment is due.
AB898-ASA2,19,64
(b) For an agreement that is renewed for a term that is longer than one week,
5no late fee may be assessed for a payment that is made within 7 days after the date
6on which the scheduled payment is due.
AB898-ASA2,19,8
7(3) Collection, application, and limitation of late fees. Late fees are subject
8to all of the following:
AB898-ASA2,19,99
(a) A late fee may not exceed $5 for each past-due rental payment.
AB898-ASA2,19,1110
(b) A late fee may be collected only once on each rental payment due, regardless
11of how long the payment remains past due.
AB898-ASA2,19,1312
(c) Payments received shall be applied first to the payment of any rent that is
13due and then to late fees and any other charges.
AB898-ASA2,19,1514
(d) A late fee may be collected at the time that the late fee accrues or at any time
15afterward.
AB898-ASA2,19,18
16(4) Effect of outstanding late fee on transfer of ownership. A
17rental-purchase company may require payment of any outstanding late fees before
18transferring ownership of rental property to a lessee.
AB898-ASA2,19,22
19422.615 Reinstatement of terminated rental-purchase agreement. (1) 20Reinstatement generally. A lessee may reinstate a terminated rental-purchase
21agreement without losing any rights or options previously acquired if all of the
22following apply:
AB898-ASA2,19,2423
(a) The lessee returned or surrendered the rental property within 7 days after
24the termination of the rental-purchase agreement.
AB898-ASA2,20,5
1(b) Not more than 60 days have passed after the date on which the rental
2property was returned to the rental-purchase company or, if the lessee has paid
3two-thirds or more of the total number of rental payments necessary to acquire
4ownership of the rental property, not more than 120 days have passed since the date
5on which the rental property was returned to the rental-purchase company.
AB898-ASA2,20,9
6(2) Authorized conditions on reinstatement. As a condition of reinstatement
7under this section, the rental-purchase company may require the payment of all
8past-due rental charges, any applicable late fees, a reinstatement fee not to exceed
9$5, and the rental payment for the next term.
AB898-ASA2,20,15
10(3) Effect of repossession on reinstatement. Nothing in this section prohibits
11a rental-purchase company from attempting to repossess rental property upon
12termination of a rental-purchase agreement, but such efforts do not affect the
13lessee's right to reinstate as long as the rental property is repossessed, voluntarily
14returned, or surrendered within 7 days after the termination of the rental-purchase
15agreement.
AB898-ASA2,20,20
16(4) Property available upon reinstatement. Upon reinstatement, the
17rental-purchase company shall provide the lessee with the same rental property, if
18the property is available and is in the same condition as when it was returned to the
19rental-purchase company, or with substitute property of comparable quality and
20condition.
AB898-ASA2,20,22
21422.616 Default and right to cure. (1) Default generally. A lessee is in
22default under a rental-purchase agreement if any of the following applies:
AB898-ASA2,21,223
(a) The lessee fails to return rental property within 7 days after the date on
24which the last rental term for which a rental payment was made expires, unless the
1lessee has exercised an early-purchase option or has made all rental payments
2necessary to acquire ownership of the rental property.
AB898-ASA2,21,43
(b) The lessee materially breaches any other provision of the rental-purchase
4agreement.
AB898-ASA2,21,8
5(2) Default; necessary for lessee liability. No cause of action shall accrue
6against a lessee with respect to the lessee's obligations under a rental-purchase
7agreement except upon default and the expiration of any applicable period of time
8allowed for cure of the default.
AB898-ASA2,21,15
9(3) Notice of default; general requirement. Except as provided in sub. (4),
10as a condition precedent to bringing an action against a lessee arising out of the
11lessee's default, a rental-purchase company shall provide a written notice of the
12default and of the right to cure the default to the lessee. The notice shall specify the
13default and the action required to cure the default and shall inform the lessee that
14if the default is not cured within 15 days after the notice is given the rental-purchase
15company may bring an action against the lessee.
AB898-ASA2,21,21
16(4) Notice of default; exception. A rental-purchase company is not required
17to provide a notice of default and right to cure as a condition precedent to bringing
18an action against a lessee if the lessee breaches the agreement and, in so doing, may
19or does materially impair the condition, value or protection of the rental property, or
20otherwise if each of the following occurred twice during the 12 months before the date
21of the current default with respect to the same rental-purchase agreement:
AB898-ASA2,21,2222
(a) The lessee was in default.
AB898-ASA2,21,2423
(b) The rental-purchase company gave the lessee written notice of the default
24and of the lessee's right to cure under sub. (3).
AB898-ASA2,21,2525
(c) The lessee cured the default.
AB898-ASA2,22,4
1(5) Request for voluntary surrender of property. A rental-purchase
2company may request the voluntary return or surrender of rental property prior to
3the declaration of a default and the sending of written notice of default and right to
4cure. A request under this subsection is subject to sub. (6) and s. 427.104.
AB898-ASA2,22,6
5(6) Direct contact for purposes of repossession. (a) In this subsection,
6"reasonable effort" means any of the following:
AB898-ASA2,22,87
1. Provided written notice, by certified mail, to the last known address of the
8lessee.
AB898-ASA2,22,99
2. Engaged in a telephone conversation with the lessee.
AB898-ASA2,22,1610
3. Attempted at least once on each of 2 consecutive days occurring after the
11most recent rental payment due date to engage in a telephone conversation with the
12lessee. Each attempt shall be made to the last known telephone number at the
13lessee's address. If the rental-purchase company attempts to engage in such a
14telephone conversation and discovers that the telephone number is disconnected, the
15rental-purchase company need only have made the initial attempt to engage in a
16telephone conversation with the lessee.
AB898-ASA2,22,2217
(b) 1. Except as provided in subd. 2., no rental-purchase company may take or
18attempt to take possession of rental property under a rental-purchase agreement by
19any means other than the legal process specified in this section or by return or
20voluntary surrender of the rental property by the lessee until at least 48 hours have
21lapsed after the rental-purchase company has made a reasonable effort to contact
22the lessee and request the return or voluntary surrender of the rental property.
AB898-ASA2,22,2523
2. If the rental-purchase company has attempted to engage in a telephone
24conversation with the lessee and the telephone number at the lessee's address has
25been disconnected, the 48-hour requirement under subd. 1. does not apply.
AB898-ASA2,23,2
1(c) The rental-purchase company shall maintain all necessary records to verify
2compliance with this subsection.
AB898-ASA2,23,6
4423.102 Scope. This chapter applies to all consumer transactions, except that
5subch. II does not apply to cemetery preneed sales under s. 440.92
, and subch. III
6applies to rental-purchase agreements.
AB898-ASA2,23,17
8423.301 False, misleading or deceptive advertising. No merchant
or
9rental-purchase company shall advertise, print, display, publish, distribute or
10broadcast or cause to be advertised, printed, displayed, published, distributed or
11broadcast, in any manner any statement or representation with regard to the
12extension of consumer credit including the rates, terms or conditions for the
13extension of such credit, which is false, misleading, or deceptive, or which omits to
14state material information with respect to the extension of credit that is necessary
15to make the statements therein not false, misleading or deceptive. With respect to
16matters specifically governed by the federal consumer credit protection act,
17compliance with such act satisfies the requirements of this section.
AB898-ASA2,23,23
19423.302 Remedies and penalty. In addition to any other remedy provided
20by law, a customer who has been induced to consummate a consumer credit
21transaction
or a lessee who has been induced to consummate a rental-purchase
22agreement as a result of advertising in violation of s. 423.301 shall be entitled to a
23recovery from the merchant in accordance with s. 425.305.
AB898-ASA2,24,4
1425.305 Transactions which are void. (1) In a transaction to which this
2section applies, the customer
or lessee to a rental-purchase agreement shall be
3entitled to retain the goods, services or money received pursuant to the transaction
4without obligation to pay any amount.
AB898-ASA2,24,7
5(2) In addition, the customer
or lessee to a rental-purchase agreement shall
6be entitled to recover any sums paid to the merchant
or rental-purchase company 7pursuant to the transaction.
AB898-ASA2, s. 27
8Section
27. Subchapter V of chapter 425 of the statutes [precedes 425.501] is
9created to read:
AB898-ASA2,24,1111
consumer transactionS —
AB898-ASA2,24,1212
remedies and penalties
AB898-ASA2,24,1414
Penalties, civil actions,
AB898-ASA2,24,1515
limitations, and venue relating
AB898-ASA2,24,1616
to rental-purchase agreements
AB898-ASA2,24,17
17425.501 Scope. This subchapter applies only to rental-purchase agreements.
AB898-ASA2,24,23
18425.502 Civil actions and defenses.
(1) Liability generally. Except as
19provided under subs. (2) to (8), a rental-purchase company that violates any
20provision of chs. 421 to 427 relating to rental-purchase agreements is liable to a
21lessee that is damaged as a result of that violation for the costs of the action and,
22notwithstanding s. 814.04 (1), for reasonable attorney fees as determined by the
23court, plus an amount equal to the sum of the following:
AB898-ASA2,24,2524
(a) The actual damages, including any incidental and consequential damages,
25sustained by the lessee as a result of the violation.
AB898-ASA2,25,4
1(b) An amount equal to 25 percent of the total amount of payments necessary
2to acquire ownership of the rental property under the lessee's rental-purchase
3agreement, except that liability under this paragraph may not be less than $100 nor
4more than $1,000.
AB898-ASA2,25,10
5(2) Temporary relief; injunctions. The administrator of the division of
6banking in the department of financial institutions may bring a civil action to
7restrain, by temporary or permanent injunction, a rental-purchase company from
8violating any provision of chs. 421 to 427 relating to rental-purchase agreements,
9or from engaging in false, misleading, deceptive, or unconscionable conduct, in
10rental-purchase transactions.