AB587: Bill Text

AB587,21,6 (2) Cash price. The price at which the rental-purchase company would sell the rental property to the lessee if the lessee were to pay for the rental property in full on the date on which the rental-purchase agreement is executed, along with a statement that, if the lessee intends to acquire ownership of the rental property and is able to pay for the property in full or is able to obtain credit to finance the purchase, the lessee may be able to purchase similar property from a retailer at a lower cost.

AB587,21,10 (3) Rental payments to acquire ownership. The total number, total dollar amount, and timing of all rental payments necessary to acquire ownership of the rental property, excluding any applicable taxes, application or processing charge, delivery fee, liability damage waiver fee, and fees for optional services.

AB587,21,17 (4) Cost of rental services. The difference between the total dollar amount of payments necessary to acquire ownership of the rental property disclosed under sub. (3) and the cash price of the property disclosed under sub. (2). The rental-purchase company shall also include a statement substantially similar to the following: "The cost of rental services is the amount you will pay in addition to the cash price if you acquire ownership of the rented goods by making all payments necessary to acquire ownership."

AB587,21,20 (5) Rental payment. The periodic rental payment for the rental property, including any applicable taxes, liability damage waiver fees, and fees for optional services.

AB587,21,24 (6) Up-front payment. Any payment required of the lessee at the time that the agreement is executed or the rental property is delivered, including the initial rental payment, any application or processing charge, any delivery fee, and any charge for a liability damage waiver or for other optional services to which the lessee agrees.

AB587,22,6 (7) Other charges and fees to acquire ownership. The dollar amount, both itemized and in total, of all taxes, liability damage waiver fees, fees for optional services, processing fees, application fees, and delivery charges that the lessee would incur if the lessee were to rent the rental property until the lessee acquires ownership, assuming that the lessee does not add or decline the liability damage waiver or optional services after signing the rental-purchase agreement.

AB587,22,14 (8) Total payments to acquire ownership. The total of all charges required to be paid by the lessee to acquire ownership of the rental property, which shall consist of the total dollar amount of all rental payments disclosed under sub. (3), and the total dollar amount of all other charges and fees disclosed under sub. (7), along with a statement that this is the amount a lessee will pay to acquire ownership of the rental property if the tax rates do not change and if the lessee does not add or decline the liability damage waiver or optional services after signing the rental-purchase agreement.

AB587,22,17 (9) Other charges. An itemized description of any other charges or fees that the rental-purchase company may charge the lessee that are not otherwise disclosed in the rental-purchase agreement.

AB587,22,20 (10) Summary of early-purchase option. A statement summarizing the terms of the lessee's options to acquire ownership of the rental property as provided in s. 422.607.

AB587,23,2 (11) Responsibility for theft or damage. A statement that, unless otherwise agreed, the lessee is responsible for the fair market value of the rental property, determined according to the early-purchase option formula under sub. (10), if the rental property is stolen, damaged, or destroyed while in the possession of or subject to the control of the lessee. The statement shall indicate that the fair market value will be determined as of the date on which the rental property is stolen, damaged, or destroyed.

AB587,23,10 (12) Service and warranty. A statement that during the term of the rental- purchase agreement, the rental-purchase company is required to service the rental property and maintain it in good working condition, as long as no other person has serviced the rental property. In lieu of servicing the rental property, the rental-purchase company may, at its option, replace the rental property. The rental-purchase company's obligation to provide service is limited to defects in the property not caused by improper use or neglect by the lessee or harmful conditions outside the control of the rental-purchase company or manufacturer.

AB587,23,13 (13) Termination at option of lessee. A statement that the lessee may terminate the agreement at any time without penalty by voluntarily surrendering or returning the rental property in good repair.

AB587,23,15 (14) Right to reinstate. A brief explanation of the lessee's right to reinstate a rental-purchase agreement under s. 422.614.

AB587,23,23 (15) Rental, not purchase. A statement that the lessee will not own the rental property until the lessee has made all payments necessary to acquire ownership or has exercised the lessee's early-purchase option. The rental-purchase company shall also include a notice reading substantially as follows: "You are renting this property. You will not own the property until you make all payments necessary to acquire ownership or until you exercise your early-purchase option. If you do not make your payments as scheduled or exercise your early-purchase option, the rental-purchase company may repossess the property."

AB587,24,2 (16) Information about rental-purchase company and lessee. The names of the rental-purchase company and the lessee, the rental-purchase company's business address and telephone number, the lessee's address, and the date on which the rental-purchase agreement is executed.

AB587,24,7 (17) Optional services. Space for a specific, separately signed, affirmative, written indication of the lessee's desire for any optional service for which a charge is assessed. The lessee's request must be obtained after a written disclosure of the cost of the optional service is made, and the cost and term of such service must be listed at or near the signature space.

AB587,24,9 422.604 Prohibited provisions of rental-purchase agreements. (1) A rental-purchase agreement may not contain any of the following:

AB587,24,10 (a) Confession. A confession of judgment.

AB587,24,13 (b) Security. A provision granting the rental-purchase company a security interest in any property, except rental property delivered by the rental-purchase company under the rental-purchase agreement.

AB587,24,18 (c) Repossession. A provision authorizing a rental-purchase company, or an agent of the rental-purchase company, to enter the lessee's premises without the lessee's contemporaneous 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.

AB587,24,22 (d) 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 chs. 421 to 427 relating to rental-purchase agreements.

AB587,24,25 (e) 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.

AB587,25,2 (f) Insurance. A provision requiring the lessee to purchase insurance from the rental-purchase company to insure the rental property.

AB587,25,3 (g) Attorney fees. A provision requiring the lessee to pay any attorney fees.

AB587,25,4 (2) A violation of this section is subject to s. 425.305.

AB587,25,11 422.605 Liability waiver. A rental-purchase company may offer a liability waiver to the lessee. The terms of the waiver must be provided to the lessee in writing, incorporated into the rental-purchase agreement or on a separate document. The face of the writing shall clearly disclose that the lessee is not required to purchase the waiver. The fee for the waiver may not exceed 10 percent of the rental payment due under the rental-purchase agreement. The lessee shall be entitled to cancel the waiver at the end of any rental term.

AB587,25,15 422.606 Price and cost limitations. (1) Limits on cash prices. The cash price for rental property may not exceed an amount equal to twice the actual purchase price of the rental property, including any applicable freight charges, paid by the rental-purchase company to a manufacturer or wholesaler.

AB587,25,19 (2) Limits on cost of rental services and other charges. The total amount charged by the rental-purchase company for the cost of rental services and all required charges or fees, excluding applicable taxes, in a rental-purchase transaction shall not exceed the cash price of the property.

AB587,25,21 (3) Unconscionability. A court may not find that a rental-purchase transaction that complies with this section is unconscionable under s. 425.107 (3) (c).

AB587,26,4 422.607 Acquisition of ownership. At any time after the initial rental period, a lessee may acquire ownership of the property that is the subject of the rental-purchase agreement by tendering an amount not to exceed an amount equal to the cash price of the rental property multiplied by a fraction that has as its numerator the number of periodic rental payments remaining under the rental-purchase agreement and that has as its denominator the total number of periodic rental payments. A rental-purchase company may also require the lessee to pay any accrued unpaid rental payments and fees.

AB587,26,7 422.608 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.

AB587,26,16 (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 was terminated 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.

AB587,26,21 (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 termination of a rental-purchase agreement, 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.

AB587,27,2 (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.

AB587,27,6 422.609 Advertising disclosure required. If an advertisement for a rental-purchase agreement refers to or states the amount of a payment for a specific item of property, the advertisement shall also clearly and conspicuously state all of the following:

AB587,27,7 (1) That the transaction advertised is a rental-purchase agreement.

AB587,27,9 (2) The total number and total dollar amount of all rental payments necessary to acquire ownership of the property.

AB587,27,12 (3) 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.

AB587,27,16 422.610 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:

AB587,27,17 (a) The cash price that a lessee would pay to purchase the property.

AB587,27,18 (b) The amount and timing of the rental payments.

AB587,27,20 (c) The total number and total amount of all rental payments necessary to acquire ownership of the property under a rental-purchase agreement.

AB587,27,21 (d) The cost of rental services under a rental-purchase agreement.

AB587,27,22 (e) Whether the property is new or used.

AB587,28,2 (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.

AB587,28,9 422.611 Authorized referral transactions. Notwithstanding any other provision in chs. 421 to 427, 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 section 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.

AB587,28,11 422.612 Termination of rental-purchase agreement. The termination date of a rental-purchase agreement is the earlier of the following:

AB587,28,13 (1) The day specified in the rental-purchase agreement as the day on which the rental term ends.

AB587,28,14 (2) The date on which the lessee voluntarily surrenders the rental property.

AB587,28,24 422.613 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.

AB587,29,2 (2) Grace periods. The following grace periods shall apply to rental payments made with respect to a rental-purchase agreement:

AB587,29,5 (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.

AB587,29,8 (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.

AB587,29,10 (3) Collection, application, and limitation of late fees. Late fees are subject to all of the following:

AB587,29,11 (a) A late fee may not exceed $5 for each past-due rental payment.

AB587,29,13 (b) A late fee may be collected only once on each rental payment due, regardless of how long the payment remains past due.

AB587,29,15 (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.

AB587,29,17 (d) A late fee may be collected at the time that the late fee accrues or at any time afterward.

AB587,29,20 (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.

AB587,29,24 422.614 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:

AB587,30,2 (a) The lessee returned or surrendered the rental property within 7 days after the termination of the rental-purchase agreement.

AB587,30,7 (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.

AB587,30,11 (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.

AB587,30,17 (3) Effect of repossession on reinstatement. Subject to s. 422.616, 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.

AB587,30,22 (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.

AB587,30,24 422.615 Default and right to cure. (1) Default generally. A lessee is in default under a rental-purchase agreement if any of the following applies:

AB587,31,4 (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.

AB587,31,7 (b) The lessee breaches any other provision of the rental-purchase agreement and such breach materially impairs the condition, value, or protection of the rental property.

AB587,31,11 (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.

AB587,31,20 (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 shall inform the lessee that the lessee may cure the default by tendering an amount equal to all unpaid and due rental payments, fees, and taxes, and the next periodic rental payment, within 15 days after the notice is given. The act of curing a default restores to the lessee the lessee's rights under the agreement as though no default had occurred.

AB587,31,25 (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 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:

AB587,32,1 (a) The lessee was in default.

AB587,32,3 (b) The rental-purchase company gave the lessee written notice of the default and of the lessee's right to cure under sub. (3).

AB587,32,4 (c) The lessee cured the default.

AB587,32,9 422.616 Surrender and repossession. (1) 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 under s. 422.615. A request under this subsection is subject to sub. (2) and s. 427.104.

AB587,32,11 (2) Direct contact for purposes of repossession. (a) In this subsection, "reasonable effort" means any of the following:

AB587,32,13 1. Provided written notice, by certified mail, to the last-known address of the lessee.

AB587,32,14 2. Engaged in a telephone conversation with the lessee.

AB587,32,21 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.

AB587,33,2 (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 s. 422.615 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.

AB587,33,5 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.

AB587,33,7 (c) The rental-purchase company shall maintain all necessary records to verify compliance with this subsection.

AB587, s. 19 Section 19. 423.201 (2) of the statutes is amended to read:

AB587,33,11 423.201 (2) "Consumer approval transaction" does not include a catalog sale that is not accompanied by any other solicitation or, a consumer loan conducted and consummated entirely by mail, or a rental-purchase agreement.

AB587, s. 20 Section 20. 423.301 of the statutes is amended to read:

AB587,33,23 423.301 False, misleading, or deceptive advertising. No merchant 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 a consumer credit transaction or rental-purchase agreement including the rates, terms, or conditions for the extension of such credit transaction or agreement, which is false, misleading, or deceptive, or which omits to state material information with respect to the extension of credit transaction or agreement 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.

AB587, s. 21 Section 21. 423.302 of the statutes is amended to read:

AB587,34,5 423.302 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 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.

AB587, s. 22 Section 22. 423.401 (1) of the statutes is amended to read: