AB587: Bill Text

AB587,34,15 425.102 Scope. This subchapter applies to actions or other proceedings brought by a creditor to enforce rights arising from consumer credit transactions and to extortionate extensions of credit under s. 425.108. Section 425.107 also applies to rental-purchase agreements.

AB587, s. 24 Section 24. 425.107 (1) of the statutes is amended to read:

AB587,34,24 425.107 (1) With respect to a consumer credit transaction or rental-purchase agreement, if the court as a matter of law finds that any aspect of the transaction or agreement, any conduct directed against the customer by a party to the transaction or agreement, or any result of the transaction or agreement is unconscionable, the court shall, in addition to the remedy and penalty authorized in sub. (5), either refuse to enforce the transaction or agreement against the customer, or so limit the application of any unconscionable aspect or conduct to avoid any unconscionable result.

AB587, s. 25 Section 25. 425.107 (3) (intro.) of the statutes is amended to read:

AB587,35,3 425.107 (3) (intro.) Without limiting the scope of sub. (1), the court may consider, among other things, any of the following as pertinent to the issue of unconscionability:

AB587, s. 26 Section 26. 425.107 (3) (a) of the statutes is amended to read:

AB587,35,6 425.107 (3) (a) That the practice unfairly takes advantage of the lack of knowledge, ability, experience or capacity of customers; .

AB587, s. 27 Section 27. 425.107 (3) (b) of the statutes is amended to read:

AB587,35,10 425.107 (3) (b) That those engaging in the practice know of the inability of customers to receive benefits properly anticipated from the goods or services involved;.

AB587, s. 28 Section 28. 425.107 (3) (c) of the statutes is amended to read:

AB587,35,15 425.107 (3) (c) That Except as provided in s. 422.606 (3), that there exists a gross disparity between the price of goods or services and their value as measured by the price at which similar goods or services are readily obtainable by other customers, or by other tests of true value;.

AB587, s. 29 Section 29. 425.107 (3) (d) of the statutes is amended to read:

AB587,35,20 425.107 (3) (d) That the practice may enable merchants to take advantage of the inability of customers reasonably to protect their interests by reason of physical or mental infirmities, illiteracy or inability to understand the language of the agreement, ignorance or lack of education or similar factors;.

AB587, s. 30 Section 30. 425.107 (3) (e) of the statutes is amended to read:

AB587,35,23 425.107 (3) (e) That the terms of the transaction or agreement require customers to waive legal rights;.

AB587, s. 31 Section 31. 425.107 (3) (f) of the statutes is amended to read:

AB587,36,3 425.107 (3) (f) That the terms of the transaction or agreement require customers to unreasonably jeopardize money or property beyond the money or property immediately at issue in the transaction; or agreement.

AB587, s. 32 Section 32. 425.107 (3) (g) of the statutes is amended to read:

AB587,36,7 425.107 (3) (g) That the natural effect of the practice would reasonably cause or aid in causing customers to misunderstand the true nature of the transaction or agreement or their rights and duties thereunder;.

AB587, s. 33 Section 33. 425.107 (3) (h) of the statutes is amended to read:

AB587,36,11 425.107 (3) (h) That the writing purporting to evidence the obligation of the customer in the transaction or agreement contains terms or provisions or authorizes practices prohibited by law; and.

AB587, s. 34 Section 34. 425.107 (5) of the statutes is amended to read:

AB587,36,16 425.107 (5) In addition to the protections afforded in sub. (1), the customer shall be entitled upon a finding of unconscionability to recover from the creditor merchant or the person responsible for the unconscionable conduct a remedy and penalty in accordance with s. 425.303.

AB587, s. 35 Section 35. 425.301 (1) of the statutes is amended to read:

AB587,36,22 425.301 (1) The remedies provided by this subchapter shall be liberally administered to the end that the customer as the aggrieved party shall be put in at least as good a position as if the creditor merchant had fully complied with chs. 421 to 427. Recoveries under chs. 421 to 427 shall not in themselves preclude the award of punitive damages in appropriate cases.

AB587, s. 36 Section 36. 425.312 of the statutes is created to read:

AB587,37,3 425.312 Rental-purchase companies. (1) 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:

AB587,37,5 (a) The actual damages, including any incidental and consequential damages, the lessee sustains as a result of the violation.

AB587,37,9 (b) An amount equal to 25 percent of the total amount of periodic rental 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.

AB587,37,11 (2) This section applies to all violations regarding rental-purchase agreements for which no other remedy is specifically provided.

AB587, s. 37 Section 37. 426.102 (1) of the statutes is amended to read:

AB587,37,15 426.102 (1) Make or solicit consumer approval transactions (s. 423.201) or, consumer credit transactions, or rental-purchase agreements, or modifications thereof.

AB587, s. 38 Section 38. 426.108 (intro.) of the statutes is amended to read:

AB587,37,22 426.108 Unconscionable conduct. (intro.) The administrator shall promulgate rules declaring specific conduct in consumer credit transactions and rental-purchase agreements and the collection of debts arising from consumer credit such transactions and agreements to be unconscionable and prohibiting the use of those unconscionable acts. In promulgating rules under this section, the administrator shall consider, among other things, all of the following:

AB587, s. 39 Section 39. 426.108 (5) of the statutes is amended to read:

AB587,37,25 426.108 (5) That the terms of the transaction or agreement require customers to waive legal rights.

AB587, s. 40 Section 40. 426.108 (6) of the statutes is amended to read:

AB587,38,4 426.108 (6) That the terms of the transaction or agreement require customers to unreasonably jeopardize money or property beyond the money or property immediately at issue in the transaction.

AB587, s. 41 Section 41. 426.108 (7) of the statutes is amended to read:

AB587,38,8 426.108 (7) That the natural effect of the practice is to cause or aid in causing customers to misunderstand the true nature of the transaction or agreement or their rights and duties under the transaction or agreement.

AB587, s. 42 Section 42. 426.108 (8) of the statutes is amended to read:

AB587,38,12 426.108 (8) That the writing purporting to evidence the obligation of the customers in the transaction or agreement contains terms or provisions or authorizes practices prohibited by law.

AB587, s. 43 Section 43. 426.110 (2) (intro.) of the statutes is amended to read:

AB587,38,16 426.110 (2) (intro.) Actions may be maintained under this section against any person who in making, soliciting or enforcing consumer credit transactions or rental-purchase agreements engages in any of the following kinds of conduct:

AB587, s. 44 Section 44. 426.110 (2) (a) of the statutes is amended to read:

AB587,38,19 426.110 (2) (a) Making or enforcing unconscionable terms or provisions of consumer credit transactions; or rental-purchase agreements.

AB587, s. 45 Section 45. 426.110 (2) (b) of the statutes is amended to read:

AB587,38,23 426.110 (2) (b) False, misleading, deceptive, or unconscionable conduct in inducing customers to enter into consumer credit transactions; or rental-purchase agreements.

AB587, s. 46 Section 46. 426.110 (2) (c) of the statutes is amended to read:

AB587,39,3 426.110 (2) (c) False, misleading, deceptive, or unconscionable conduct in enforcing debts or security interests arising from consumer credit transactions or rental-purchase agreements.

AB587, s. 47 Section 47. 426.110 (14) of the statutes is amended to read:

AB587,39,12 426.110 (14) A merchant shall not be liable in a class action for specific penalties under s. 425.302 (1) (a), 425.303 (1), 425.304 (1), 425.305 (1), 425.312 (1) (b), or 429.301 (1) for which it would be liable in individual actions by reason of violations of chs. 421 to 427 and 429 or of conduct prescribed in sub. (2) unless it is shown by a preponderance of the evidence that the violation was a willful and knowing violation of chs. 421 to 427 and 429. No recovery in an action under this subsection may exceed $100,000, except that in an action involving a rental-purchase agreement, no recovery may exceed $500,000.

AB587, s. 48 Section 48. 426.201 (1) (a) of the statutes is amended to read:

AB587,39,16 426.201 (1) (a) Make or solicit consumer credit transactions or rental-purchase agreements, except a person who engages in consumer credit transactions solely through honoring credit cards issued by 3rd parties not related to such person.

AB587, s. 49 Section 49. 426.201 (2m) (b) 3. of the statutes is created to read:

AB587,39,19 426.201 (2m) (b) 3. This paragraph does not apply to a rental-purchase company.

AB587, s. 50 Section 50. 426.202 (1m) (c) of the statutes is amended to read:

AB587,40,2 426.202 (1m) (c) Amount of registration fee. The amount of the registration fee shall be determined in accordance with rates set by the administrator. In setting these rates, the administrator shall consider the costs of administering chs. 421 to 427 and 429, including the costs of enforcement, education and seeking voluntary compliance with chs. 421 to 427 and 429. The For consumer credit transactions, the registration fee for a person shall be based on the person's year-end balance for the reporting period.

AB587, s. 51 Section 51. 427.102 of the statutes is amended to read:

AB587,40,7 427.102 Scope. This chapter applies to conduct and practices in connection with the collection of obligations arising from consumer transactions, including transactions that are primarily for an agricultural purpose, and to transactions in connection with rental-purchase agreements.

AB587, s. 52 Section 52. Initial applicability.

AB587,40,10 (1) This act first applies to rental-purchase agreements, and conduct pursuant to those agreements, that are entered into on the effective date of this subsection.

AB587, s. 53 Section 53. Effective date.

AB587,40,12 (1) This act takes effect on the 90th day after publication.

AB587,40,13 (End)