Amendment ASA2-AB898

AB898-ASA2,16,21 (b) The total number and total dollar amount of all rental payments necessary to acquire ownership of the property.

AB898-ASA2,16,24 (c) That the lessee does not acquire ownership of the property if the lessee fails to make all rental payments or other payments necessary to acquire ownership of the property.

AB898-ASA2,17,3 (2) Exception. Subsection (1) does not apply to any in-store display or any advertisement that is published in the yellow pages of a telephone directory or in any similar directory of businesses.

AB898-ASA2,17,7 422.611 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:

AB898-ASA2,17,8 (a) The cash price that a lessee would pay to purchase the property.

AB898-ASA2,17,9 (b) The amount and timing of the rental payments.

AB898-ASA2,17,11 (c) The total number and total amount of all rental payments necessary to acquire ownership of the property under a rental-purchase agreement.

AB898-ASA2,17,12 (d) The cost of rental services under a rental-purchase agreement.

AB898-ASA2,17,13 (e) Whether the property is new or used.

AB898-ASA2,17,18 (2) Exceptions. If property is offered for rent under a rental-purchase 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 would be impractical, a rental-purchase company may make the disclosures required under sub. (1) in a catalog or list, if the catalog or list is readily available to prospective lessees.

AB898-ASA2,17,25 422.612 Referral transactions. (1) Prohibited referral transactions. No rental-purchase company may induce any individual to enter into a rental-purchase agreement by giving or offering to give a rebate or discount to the individual in consideration of the individual's giving to the rental-purchase company the names of prospective lessees if the earning of the rebate or discount is contingent upon the occurrence of any event that takes place after the time that the individual enters into the rental-purchase agreement.

AB898-ASA2,18,7 (2) Authorized referral transactions. After entering into a rental-purchase agreement, a rental-purchase company may give or offer to give a rebate or discount to a lessee under the rental-purchase agreement in consideration of the lessee's giving to the rental-purchase company the names of prospective lessees. A rebate or discount under this subsection may be contingent upon the occurrence of any event that takes place after the time that the names are given to the rental-purchase company.

AB898-ASA2,18,9 422.613 Termination of rental-purchase agreement. The termination date of a rental-purchase agreement is the earlier of the following:

AB898-ASA2,18,12 (1) The day specified in the rental-purchase agreement as the day on which the rental term ends, unless a different day has been established under the rental-purchase agreement.

AB898-ASA2,18,13 (2) The date on which the lessee voluntarily surrenders the rental property.

AB898-ASA2,18,23 422.614 Late payment, grace period, and late fees. (1) Late fee generally. If a lessee fails to make any payment when due under a rental-purchase agreement or if, at the end of any rental term, the lessee fails to return the rental property or to renew the rental-purchase agreement for an additional term, the rental-purchase company may require the lessee to pay a late fee. Except as provided in sub. (4), this subsection does not apply if the lessee's failure to return rental property or failure to renew the rental-purchase agreement at the end of the rental term is due to the lessee's exercise of an early-purchase option under the rental-purchase agreement or is due to the lessee's making all payments necessary to acquire ownership of the rental property.

AB898-ASA2,18,25 (2) Grace periods. The following grace periods shall apply to rental payments made with respect to a rental-purchase agreement:

AB898-ASA2,19,3 (a) For an agreement that is renewed on a weekly basis, no late fee may be assessed for a payment that is made within 2 days after the date on which the scheduled payment is due.

AB898-ASA2,19,6 (b) For an agreement that is renewed for a term that is longer than one week, no late fee may be assessed for a payment that is made within 7 days after the date on which the scheduled payment is due.

AB898-ASA2,19,8 (3) Collection, application, and limitation of late fees. Late fees are subject to all of the following:

AB898-ASA2,19,9 (a) A late fee may not exceed $5 for each past-due rental payment.

AB898-ASA2,19,11 (b) A late fee may be collected only once on each rental payment due, regardless of how long the payment remains past due.

AB898-ASA2,19,13 (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.

AB898-ASA2,19,15 (d) A late fee may be collected at the time that the late fee accrues or at any time afterward.

AB898-ASA2,19,18 (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.

AB898-ASA2,19,22 422.615 Reinstatement of terminated rental-purchase agreement. (1) Reinstatement generally. A lessee may reinstate a terminated rental-purchase agreement without losing any rights or options previously acquired if all of the following apply:

AB898-ASA2,19,24 (a) The lessee returned or surrendered the rental property within 7 days after the termination of the rental-purchase agreement.

AB898-ASA2,20,5 (b) Not more than 60 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 rental payments necessary to acquire ownership of the rental property, not more than 120 days have passed since the date on which the rental property was returned to the rental-purchase company.

AB898-ASA2,20,9 (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 rental payment for the next term.

AB898-ASA2,20,15 (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 rental-purchase agreement, but such efforts do not affect the lessee's right to reinstate as long as the rental property is repossessed, voluntarily returned, or surrendered within 7 days after the termination of the rental-purchase agreement.

AB898-ASA2,20,20 (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.

AB898-ASA2,20,22 422.616 Default and right to cure. (1) Default generally. A lessee is in default under a rental-purchase agreement if any of the following applies:

AB898-ASA2,21,2 (a) The lessee fails to return rental property within 7 days after the date on which the last rental term for which a rental payment was made expires, unless the lessee has exercised an early-purchase option or has made all rental payments necessary to acquire ownership of the rental property.

AB898-ASA2,21,4 (b) The lessee materially breaches any other provision of the rental-purchase agreement.

AB898-ASA2,21,8 (2) Default; necessary for lessee liability. No cause of action shall accrue against a lessee with respect to the lessee's obligations under a rental-purchase agreement except upon default and the expiration of any applicable period of time allowed for cure of the default.

AB898-ASA2,21,15 (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 may bring an action against the lessee.

AB898-ASA2,21,21 (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 the lessee breaches the agreement and, in so doing, may or does materially impair the condition, value or protection of the rental property, or otherwise if each of the following occurred twice during the 12 months before the date of the current default with respect to the same rental-purchase agreement:

AB898-ASA2,21,22 (a) The lessee was in default.

AB898-ASA2,21,24 (b) The rental-purchase company gave the lessee written notice of the default and of the lessee's right to cure under sub. (3).

AB898-ASA2,21,25 (c) The lessee cured the default.

AB898-ASA2,22,4 (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 sub. (6) and s. 427.104.

AB898-ASA2,22,6 (6) Direct contact for purposes of repossession. (a) In this subsection, "reasonable effort" means any of the following:

AB898-ASA2,22,8 1. Provided written notice, by certified mail, to the last known address of the lessee.

AB898-ASA2,22,9 2. Engaged in a telephone conversation with the lessee.

AB898-ASA2,22,16 3. Attempted at least once on each of 2 consecutive days occurring after the most recent rental payment due date to engage in a telephone conversation with the lessee. Each attempt shall be made to the last known telephone number at the lessee's address. If the rental-purchase company attempts to engage in such a telephone conversation and discovers that the telephone number is disconnected, the rental-purchase company need only have made the initial attempt to engage in a telephone conversation with the lessee.

AB898-ASA2,22,22 (b) 1. Except as provided in subd. 2., no rental-purchase company may take or attempt to take possession of rental property under a rental-purchase agreement by any means other than the legal process specified in this section or by return or voluntary surrender of the rental property by the lessee until at least 48 hours have lapsed after the rental-purchase company has made a reasonable effort to contact the lessee and request the return or voluntary surrender of the rental property.

AB898-ASA2,22,25 2. If the rental-purchase company has attempted to engage in a telephone conversation with the lessee and the telephone number at the lessee's address has been disconnected, the 48-hour requirement under subd. 1. does not apply.

AB898-ASA2,23,2 (c) The rental-purchase company shall maintain all necessary records to verify compliance with this subsection.

AB898-ASA2, s. 23 Section 23. 423.102 of the statutes is amended to read:

AB898-ASA2,23,6 423.102 Scope. This chapter applies to all consumer transactions, except that subch. II does not apply to cemetery preneed sales under s. 440.92 , and subch. III applies to rental-purchase agreements.

AB898-ASA2, s. 24 Section 24. 423.301 of the statutes is amended to read:

AB898-ASA2,23,17 423.301 False, misleading or deceptive advertising. No merchant or rental-purchase company shall advertise, print, display, publish, distribute or broadcast or cause to be advertised, printed, displayed, published, distributed or broadcast, in any manner any statement or representation with regard to the extension of consumer credit including the rates, terms or conditions for the extension of such credit, which is false, misleading, or deceptive, or which omits to state material information with respect to the extension of credit that is necessary to make the statements therein not false, misleading or deceptive. With respect to matters specifically governed by the federal consumer credit protection act, compliance with such act satisfies the requirements of this section.

AB898-ASA2, s. 25 Section 25. 423.302 of the statutes is amended to read:

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.