SB637: Bill Text

SB637,10,4 420.04 Prohibited provisions of rental-purchase agreements. A rental-purchase agreement may not contain any of the following:

SB637,10,5 (1) Confession. A confession of judgment.

SB637,10,10 (2) Repossession. A provision authorizing a rental-purchase company, or an agent of the rental-purchase company, to enter the lessee's residence without the lessee's permission, or to commit a breach of the peace in the repossession of rental property provided by the rental-purchase company under the rental-purchase agreement.

SB637,10,14 (3) 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 an agent of the rental-purchase company, or a waiver of any provision of this chapter relating to rental-purchase agreements.

SB637,10,17 (4) Overpayment. A provision requiring rental payments totaling more than the total dollar amount of all rental payments necessary to acquire ownership, as disclosed in the rental-purchase agreement.

SB637,10,19 (5) Insurance. A provision requiring the lessee to purchase insurance from the rental-purchase company to insure the rental property.

SB637,10,24 420.05 Disclosures for certain rental-purchase agreements. (1) Disclosure for property not displayed or offered primarily for rental-purchase. When property that is not displayed or offered primarily for rental-purchase is offered for rental-purchase, all of the following shall be separately disclosed prior to displaying or presenting a rental-purchase agreement to a lessee for execution:

SB637,10,25 (a) The cash price of the property.

SB637,11,1 (b) The amount of the periodic renewal payment.

SB637,11,3 (c) The total dollar amount of all periodic rental payments necessary to acquire ownership if the lessee makes all scheduled payments.

SB637,11,9 (2) Additional disclosures for property not displayed or offered primarily for rental-purchase. In addition to the disclosures required by s. 420.03, if the property that is the subject of a rental-purchase agreement was not displayed or offered primarily for rental-purchase prior to the rental-purchase transaction, all of the following additional disclosures shall be made on a separate page titled “Acknowledgment of Rental-Purchase Transaction” and signed by the lessee:

SB637,11,12 (a) The agreement is a rental-purchase agreement and the lessee does not own the property, but can obtain ownership by using ownership options provided in the agreement.

SB637,11,13 (b) The agreement is not a credit transaction.

SB637,11,16 (c) The lessee has the right to return the property to the lessor without additional charge or penalty at any time and will owe nothing further except unpaid rental charges and fees.

SB637,11,19 (d) If the lessee returns the property, the agreement offers reinstatement rights that allow the lessee to get the property back if the lessee has complied with the agreement and the law.

SB637,11,21 (e) The lessee has reviewed and understands the agreement, including the purchase option rights and the total cost if all scheduled payments are made.

SB637,11,25 420.06 Reinstatement of a rental-purchase agreement. (1) Reinstatement generally. Subject to sub. (2), a lessee may reinstate a rental-purchase agreement that has ended without losing any rights or options previously acquired if all of the following apply:

SB637,12,2 (a) The lessee voluntarily returned or surrendered the rental property within 7 days after the expiration of the rental-purchase agreement.

SB637,12,4 (b) Not more than 120 days have passed after the date on which the rental-purchase agreement ended.

SB637,12,9 (2) Authorized conditions on reinstatement. As a condition of reinstatement under sub. (1), the rental-purchase company may require the payment of all past-due rental charges, any applicable late fees, the rental payment for the next term and a reinstatement fee not to exceed $8 for agreements renewed on a monthly basis or $5 for agreements renewed more frequently than monthly.

SB637,12,15 (3) Effect of repossession on reinstatement. Subject to s. 420.04 (2), nothing in this section prohibits a rental-purchase company from repossessing or attempting to repossess rental property when a rental-purchase agreement is not renewed, but such efforts do not affect the lessee's right to reinstate as long as the rental property is voluntarily returned or surrendered within 7 days after the rental-purchase agreement expires.

SB637,12,20 (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 property of comparable quality and condition.

SB637,12,23 420.07 Receipts and statements. (1) Receipts. A rental-purchase company shall provide a written receipt to the lessee for any payment made by the lessee in cash or, upon the request of the lessee, for any other type of payment.

SB637,13,7 (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 on each rental-purchase agreement between the lessee and the rental-purchase company. A rental-purchase company is not required to provide a statement covering any rental-purchase agreement that ended more than one year prior to the date of the lessee's request. A rental-purchase company may provide a single statement covering all rental-purchase agreements or separate statements for each rental-purchase agreement, at the rental-purchase company's option.

SB637,13,12 (3) Statement due to other parties. Subject to sub. (4), upon the written request of a lessee, made during the term of or no later than one year after the rental-purchase agreement ended, a rental-purchase company shall provide a written statement to any person the lessee designates, showing the lessee's payment history under the rental-purchase agreement.

SB637,13,17 (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.

SB637,13,21 420.08 Liability damage waiver. (1) Waiver permissible. A rental-purchase company and a lessee may contract for a liability damage waiver. A rental-purchase company may charge a periodic fee for a liability damage waiver in an amount not to exceed 10 percent of the periodic rental payment.

SB637,13,23 (2) Requirements for waiver. A rental-purchase company may not sell a liability damage waiver unless all of the following apply:

SB637,14,3 (a) The contract containing the waiver is provided to the lessee in writing, either by incorporating it into the rental-purchase agreement or by providing it as a separate document.

SB637,14,5 (b) The face of the writing under par. (a) clearly discloses that the lessee is not required to purchase the waiver.

SB637,14,7 (c) The contract clearly discloses the dollar amount of the fee to be paid with each rental payment.

SB637,14,8 (d) The lessee expressly agrees to the waiver in writing.

SB637,14,13 (3) Scope of waiver. The liability damage waiver may exclude only loss or damage to the property that is the subject of the rental-purchase agreement caused by moisture, scratches, mysterious disappearance, vandalism, abandonment of the property, or any other damage intentionally caused by the lessee or that results from the lessee's willful or wanton misconduct.

SB637,14,15 (4) Waiver cancellation. The lessee is entitled to cancel the waiver at the end of any rental term.

SB637,14,16 (5) Waiver is not insurance. A liability damage waiver is not insurance.

SB637,14,20 420.09 Advertising disclosure required. If an advertisement for a rental-purchase agreement states the amount of a payment for a specific item of property, the advertisement shall also clearly and conspicuously state all of the following:

SB637,14,21 (1) That the transaction advertised is a rental-purchase agreement.

SB637,14,23 (2) The total number and total dollar amount of all rental payments necessary to acquire ownership of the property.

SB637,14,25 (3) That the lessee does not acquire ownership of the property if the lessee fails to make all payments necessary to acquire ownership of the property.

SB637,15,4 420.10 Price cards displayed. (1) Price cards generally. Except as provided in sub. (2), a card or tag that clearly and conspicuously states all of the following shall be displayed on or next to any property displayed or offered by a rental-purchase company for rent under a rental-purchase agreement:

SB637,15,5 (a) The cash price that a lessee would pay to purchase the property.

SB637,15,6 (b) The amount and timing of the rental payments.

SB637,15,8 (c) The total number and total amount of all rental payments necessary to acquire ownership of the property under a rental-purchase agreement.

SB637,15,9 (d) Whether the property is new or used.

SB637,15,15 (2) Exceptions. If property is offered for rent under a rental-purchase agreement through a catalog, whether print or electronic, or if the size of the property is such that displaying a card or tag on or next to the property would be impractical, a rental-purchase company may make the disclosures required under sub. (1) in a catalog, list, or disclosure sheet if the catalog, list, or disclosure sheet is readily available to prospective lessees and provided upon request.

SB637,15,17 420.11 Rule making. The department may promulgate rules to administer and enforce the requirements of this chapter.

SB637,15,21 420.12 Penalties. (1) Award of damages. Subject to sub. (3), a rental-purchase company that violates any provision of this chapter, rule promulgated under this chapter, or order issued under this chapter pertaining to a lessee is liable to the lessee in an amount equal to the greater of the following:

SB637,15,22 (a) The actual damages sustained by the lessee as a result of the violation.

SB637,15,25 (b) If the action is not brought as a class action, 25 percent of the total payments necessary for the lessee to acquire ownership of the rental property, but not less than $100 nor more than $1,000.

SB637,16,2 (c) If the action is brought as a class action, the amount the court determines to be appropriate, subject to sub. (2).

SB637,16,10 (2) Damage limitations in class actions. The total recovery by all lessees in any class action or series of class actions arising out of the same violation may not be more than the lesser of $500,000 or 1 percent of the net worth of the rental-purchase company. In determining the amount of any award in a class action, the court shall consider, among other relevant factors, the amount of actual damages awarded, the frequency and persistence of the violation, the rental-purchase company's resources, and the extent to which the rental-purchase company's violation was intentional.

SB637,16,15 (3) Unintentional violations. A rental-purchase company is not liable for any violation of this chapter if the rental-purchase company shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error, and the rental-purchase company maintained procedures reasonably adapted to avoid such an error.

SB637,16,19 (4) Costs and attorney fees. If a court awards any monetary amount under sub. (1) to a lessee, the rental-purchase company shall also be liable to the lessee for the costs of the action and, notwithstanding s. 814.04 (1), for reasonable attorney fees as determined by the court.

SB637,17,2 420.13 Inapplicability of Consumer Act and ch. 409. A rental-purchase agreement that complies with this chapter is not subject to the Wisconsin Consumer Act, chs. 421 to 427, or any related rule or order adopted under chs. 421 to 427, or to any provision of ch. 409, and any such rental-purchase agreement shall not be construed or regulated as a security interest, credit sale, retail installment sale, conditional sale, or any other form of consumer credit, nor considered to be the creation of a debt or extension of credit.

SB637,3 Section 3. 421.202 (11) of the statutes is created to read:

SB637,17,5 421.202 (11) Rental-purchase agreements entered into by a rental-purchase company in compliance with ch. 420.

SB637,4 Section 4. Initial applicability.

SB637,17,8 (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.

SB637,5 Section 5. Effective date.

SB637,17,10 (1) This act takes effect on the 90th day after publication.

SB637,17,11 (End)