Amendment ASA2-AB898

AB898-ASA2,23,23 423.302 Remedies and penalty. In addition to any other remedy provided by law, a customer who has been induced to consummate a consumer credit transaction or a lessee who has been induced to consummate a rental-purchase agreement as a result of advertising in violation of s. 423.301 shall be entitled to a recovery from the merchant in accordance with s. 425.305.

AB898-ASA2, s. 26 Section 26. 425.305 of the statutes is amended to read:

AB898-ASA2,24,4 425.305 Transactions which are void. (1) In a transaction to which this section applies, the customer or lessee to a rental-purchase agreement shall be entitled to retain the goods, services or money received pursuant to the transaction without obligation to pay any amount.

AB898-ASA2,24,7 (2) In addition, the customer or lessee to a rental-purchase agreement shall be entitled to recover any sums paid to the merchant or rental-purchase company pursuant to the transaction.

AB898-ASA2, s. 27 Section 27. Subchapter V of chapter 425 of the statutes [precedes 425.501] is created to read:

AB898-ASA2,24,10 CHAPTER 425

AB898-ASA2,24,11 consumer transactionS —

AB898-ASA2,24,12 remedies and penalties

AB898-ASA2,24,13 Subchapter V

AB898-ASA2,24,14 Penalties, civil actions,

AB898-ASA2,24,15 limitations, and venue relating

AB898-ASA2,24,16 to rental-purchase agreements

AB898-ASA2,24,17 425.501 Scope. This subchapter applies only to rental-purchase agreements.

AB898-ASA2,24,23 425.502 Civil actions and defenses. (1) Liability generally. Except as provided under subs. (2) to (8), a rental-purchase company that violates any provision of chs. 421 to 427 relating to rental-purchase agreements is liable to a lessee that is 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 sum of the following:

AB898-ASA2,24,25 (a) The actual damages, including any incidental and consequential damages, sustained by the lessee as a result of the violation.

AB898-ASA2,25,4 (b) An amount equal to 25 percent of the total amount of payments necessary to acquire ownership of the rental property under the lessee's rental-purchase agreement, except that liability under this paragraph may not be less than $100 nor more than $1,000.

AB898-ASA2,25,10 (2) Temporary relief; injunctions. The administrator of the division of banking in the department of financial institutions may bring a civil action to restrain, by temporary or permanent injunction, a rental-purchase company from violating any provision of chs. 421 to 427 relating to rental-purchase agreements, or from engaging in false, misleading, deceptive, or unconscionable conduct, in rental-purchase transactions.

AB898-ASA2,25,15 (3) Liability; certain violations. Except as provided in subs. (4) and (5), if a rental-purchase agreement violates s. 422.604, the lessee may retain the rental property under the rental-purchase agreement without obligation to pay any amount and may recover any amounts paid to the rental-purchase company under the rental-purchase agreement.

AB898-ASA2,26,3 (4) Class action. (a) In the case of a class action, a rental-purchase company that violates any provision of chs. 421 to 427 relating to rental-purchase agreements is liable to the members of the class in an amount equal to the actual damages incurred by the class. The total statutory damages for all lessees whose recovery is computed under sub. (1) (b) relating to statutory damages may not exceed $500,000 plus the costs of the action and, notwithstanding s. 814.04 (1), reasonable attorneys' fees as determined by the court. In determining the amount to award under sub. (1) (b), 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.

AB898-ASA2,26,9 (b) Notwithstanding par. (a), no class action may be maintained for conduct proscribed in s. 422.607, 423.301, or 427.104 (1) (h) unless the conduct has been found to violate s. 422.607, 423.301, or 427.104 (1) (h) at least 30 days prior to the occurrence of the conduct involved in the class action by an appellate court of this state or by a rule promulgated by the division of banking in the department of financial institutions, specifying with particularity the act or practice in question.

AB898-ASA2,26,11 (c) At least 30 days before commencing a class action for damages, a party must do all of the following:

AB898-ASA2,26,13 1. Notify the rental-purchase company against whom an alleged cause of action is asserted of the alleged claim or violation.

AB898-ASA2,26,15 2. Demand that the rental-purchase company correct, or otherwise remedy, the basis for the alleged claim.

AB898-ASA2,26,20 (d) The notice required in par. (c) shall be in writing, and shall be sent by certified or registered mail, return receipt requested, to the rental-purchase company at the place where the transaction occurred, the company's principal place of business within the state, or, if neither will effect actual notice, the department of financial institutions.

AB898-ASA2,26,24 (e) Except as provided in par. (g), no action for damages may be maintained under this subsection if an appropriate remedy, which shall include actual damages and may include penalties, is given, or agreed to be given within a reasonable time, to such party within 30 days after receipt of such notice.

AB898-ASA2,27,3 (f) Except as provided in par. (g), no action for damages may be maintained under this subsection upon a showing by a rental-purchase company against whom the alleged claim or violation is asserted that all of the following exist:

AB898-ASA2,27,5 1. All lessees similarly situated have been identified, or a reasonable effort to identify such other lessees has been made.

AB898-ASA2,27,7 2. All lessees identified under subd. 1. have been notified that, upon their request, the rental-purchase company shall make the appropriate remedy.

AB898-ASA2,27,9 3. The remedy requested by the lessees has been or in a reasonable time will be given.

AB898-ASA2,27,13 4. The rental-purchase company has ceased from engaging, or if immediate cessation is impossible under the circumstances, the rental-purchase company will, within a reasonable time, cease to engage in any acts on which the alleged claim is based.

AB898-ASA2,27,18 (g) An action for injunctive relief may be commenced without compliance with par. (c). Not less than 30 days after the commencement of an action for injunctive relief, and after compliance with par. (c), the lessee may amend his or her complaint without leave of court to include a request for damages. Paragraphs (e) and (f) shall apply if the complaint for injunctive relief is amended to request damages.

AB898-ASA2,27,24 (h) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order may be conditional, and may be altered or amended before the decision on the merits. If the court determines that the action may not be maintained as a class action, it shall allow the action to proceed on behalf of the parties appearing in the action.

AB898-ASA2,28,4 (i) In any class action, the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall inform each class member that:

AB898-ASA2,28,6 1. The court will exclude him or her from the class if he or she so requests by a specified date.

AB898-ASA2,28,8 2. The judgment, whether favorable or not, will include all members who do not request exclusion.

AB898-ASA2,28,10 3. Any member who does not request exclusion may enter an appearance through his or her counsel.

AB898-ASA2,28,16 (j) The judgment in an action maintained as a class action under this section, whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action, whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in par. (i) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.

AB898-ASA2,28,19 (k) When appropriate, an action may be brought or maintained as a class action with respect to particular issues, or a class may be divided into subclasses and each subclass treated as a class.

AB898-ASA2,28,23 (L) If judgment is for a class of plaintiffs, the court shall render judgment in favor of the administrator of the division of banking in the department of financial institutions and against the defendants for all costs of notice incurred by the administrator in such action.

AB898-ASA2,28,25 (m) In the conduct of actions to which this subsection applies, the court may make, alter, or amend orders that do any of the following:

AB898-ASA2,29,2 1. Determine the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument.

AB898-ASA2,29,8 2. Require, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action.

AB898-ASA2,29,9 3. Impose conditions on the representative parties or on intervenors.

AB898-ASA2,29,11 4. Require that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly.

AB898-ASA2,29,12 5. Deal with similar procedural matters.

AB898-ASA2,29,16 (n) Once certified by the court under this subsection, a class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

AB898-ASA2,29,21 (o) A rental-purchase company shall not be liable in a class action for statutory damages computed under sub. (1) (b) relating to statutory damages, unless it is shown by a preponderance of the evidence that the violation was a willful and knowing violation of any provision of chs. 421 to 427 relating to rental-purchase agreements.

AB898-ASA2,30,2 (p) Reasonable attorneys' fees in a class action shall be determined by the value of the time reasonably expended by the attorney rather than by the amount of recovery on behalf of the class. A legal aid society or legal services program that represents a class shall be awarded a reasonable service fee in lieu of reasonable attorneys' fees, equal in amount to the amount of the attorneys' fees as measured by this subsection.

AB898-ASA2,30,5 (q) The administrator of the division of banking in the department of financial institutions, whether or not a party to an action, shall bear the costs of notice except that he or she may recover such costs from the defendant as provided in par. (L).

AB898-ASA2,30,12 (5) Defense; bona fide error. Notwithstanding any other section of this chapter, no lessee shall be entitled, in an individual or class action, to recover any penalties provided under sub. (1) (b), if the rental-purchase company violating any provision of chs. 421 to 427 relating to rental-purchase agreements shows by a preponderance of the evidence that the violation was not intentional, and that the violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid these errors.

AB898-ASA2,30,21 (6) Double liability limited. The liability of a rental-purchase company under this chapter is in lieu of any liability under the federal Consumer Credit Protection Act and s. 138.09. An action by a person alleging a violation under this chapter may not be maintained if a final judgment has been rendered for or against that person with respect to the same violation under the federal Consumer Credit Protection Act or s. 138.09. If a final judgment is entered against any rental-purchase company under this chapter and the federal Consumer Credit Protection Act or s. 138.09 for the same violation, the rental-purchase company has a cause of action for appropriate relief to the extent necessary to avoid double liability.

AB898-ASA2,30,25 (7) Necessary parties. If more than one lessee is a party to the same rental-purchase agreement, all of the lessees that are parties to the rental-purchase 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).

AB898-ASA2,31,6 425.503 Limitation on actions. An action brought by a lessee under any provision of chs. 421 to 427 relating to rental-purchase agreements shall be commenced within one year after the date on which the alleged violation occurred, 2 years after the date on which the rental-purchase agreement was entered into, or one year after the date on which the last payment was made under the rental-purchase agreement, whichever is later.

AB898-ASA2,31,8 425.504 Venue. (1) Generally. The venue for a claim arising out of a rental-purchase agreement is any of the following counties:

AB898-ASA2,31,9 (a) Where the lessee resides or is personally served.

AB898-ASA2,31,10 (b) Where the rental property is located.

AB898-ASA2,31,13 (c) Where the lessee sought or acquired the rental property or signed the document evidencing his or her obligation under the terms of the rental-purchase agreement.

AB898-ASA2,31,18 (2) Change in venue. When it appears from the return of service of a summons or otherwise that the county in which an action is pending under sub. (1) is not a proper place of trial for the action, unless the defendant appears and waives the improper venue, the court shall transfer the action to any county that is a proper place of trial.

AB898-ASA2,31,21 (3) Multiple defendants. If there are several defendants in an action arising out of a rental-purchase agreement, and if venue is based on residence, venue may be in the county of residence of any of the defendants.

AB898-ASA2, s. 28 Section 28. 426.102 (intro.) of the statutes is renumbered 426.102 (1) (intro.).

AB898-ASA2, s. 29 Section 29. 426.102 (2) of the statutes is created to read:

AB898-ASA2,31,24 426.102 (2) Subchapters III and IV apply to rental-purchase agreements.

AB898-ASA2, s. 30 Section 30. Subchapter IV of chapter 426 [precedes 426.4005] of the statutes is created to read:

AB898-ASA2,32,3 chapter 426

AB898-ASA2,32,4 Subchapter IV

AB898-ASA2,32,7 Administration and licensing related to rental-purchase agreements

AB898-ASA2,32,8 426.4005 Definitions. In this subchapter:

AB898-ASA2,32,9 (1) "Administrator" means the administrator of the division.

AB898-ASA2,32,11 (2) "Division" means the division of banking in the department of financial institutions.

AB898-ASA2,32,13 426.401 License required. No person may operate as a rental-purchase company without a valid license issued by the division under this subchapter.

AB898-ASA2,32,18 426.402 Application for license; fees; bond. (1) Application. (a) An application for a license under this subchapter shall be made to the division, in writing, in the form prescribed by the division. In addition to any other information that may be required by the division, an application for a license under this subchapter shall include all of the following:

AB898-ASA2,32,19 1. If the applicant is an individual, the applicant's social security number.

AB898-ASA2,32,21 2. If the applicant is not an individual, the applicant's federal employer identification number.

AB898-ASA2,32,23 (b) The division may not disclose any information received under par. (a) 1. or 2. to any person except as follows:

AB898-ASA2,32,25 1. The division may disclose the information to the department of revenue for the sole purpose of requesting certifications under s. 73.0301.

AB898-ASA2,33,3 2. The division may disclose the information to the department of workforce development in accordance with a memorandum of understanding entered into under s. 49.857.

AB898-ASA2,33,6 (2) Application fees. At the time of applying to the division for a license under this subchapter, the applicant shall pay any applicable fee specified by the administrator by rule.

AB898-ASA2,33,9 (3) Bond. The division may require an applicant or licensee to file with the division and maintain in force a bond, in a form prescribed by and acceptable to the division, and in an amount determined by the division.

AB898-ASA2,33,18 426.403 Issuance or denial of license. (1) Investigation. Upon the filing of an application under s. 426.402 (1) and the payment of any applicable fee, the division shall perform an investigation. Except as provided in sub. (3), if the division finds that the character, general fitness, and financial responsibility of the applicant; the members of the applicant, if the applicant is a partnership, limited liability company, or association; and the officers and directors of the applicant, if the applicant is a corporation warrant the belief that the business will be operated in compliance with any provision of chs. 421 to 427 relating to rental-purchase agreements, the division shall issue a license to the applicant.

AB898-ASA2,33,24 (2) Denial; notice; hearing. Except as provided in sub. (3), the division may deny an application made under s. 426.402 (1) by providing written notice to the applicant stating the grounds for the denial. Except as provided in sub. (3), a person whose application is denied may request a hearing under s. 227.44 within 30 days after the date of denial. The division may appoint a hearing examiner under s. 227.46 to conduct the hearing.

AB898-ASA2,34,2 (3) Denial; child or family support or tax delinquency. The division may not issue a license under this chapter if any of the following applies:

AB898-ASA2,34,4 (a) The applicant fails to provide the information required under s. 426.402 (1) (a).

AB898-ASA2,34,9 (b) The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant for whom a license is not issued under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

AB898-ASA2,34,19 (c) The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of workforce development or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses, or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose application is denied under this paragraph for delinquent payments is entitled to a notice and hearing under s. 49.857, but is not entitled to any other notice or hearing under this section.

AB898-ASA2,34,23 426.404 Licenses; other business. (1) Licensed locations. A license issued under this subchapter shall specify the location at which the licensee is permitted to conduct business. A separate license shall be required for each place of business maintained by the licensee.

AB898-ASA2,34,24 (2) Assignment. A license issued under this subchapter is not assignable.

AB898-ASA2,35,2 (3) Posting. A licensee shall post its license in a conspicuous place at the location specified in the license.

AB898-ASA2,35,7 (4) Term of license; fee. Every license shall remain in force until suspended or revoked in accordance with this subchapter or surrendered by the licensee. Every licensee shall, on or before June 1 of each year, pay to the division an annual license fee specified by the division by rule and, if required by the division, provide a rider or endorsement to increase the amount of any bond required under s. 426.402 (3).

AB898-ASA2,35,12 (5) Other business prohibited. No licensee may conduct business as a rental-purchase company within any office, room, or place of business in which any other business is solicited or engaged in, unless the licensee is authorized to do so, in writing, by the division. For the purpose of this subsection, the division may not unreasonably withhold any such authorization.