AB587: Bill Text

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:

AB587,34,10 423.401 (1) Limitation. Except as provided in sub. (2), a merchant may not record a customer's address, telephone number or any other identification information as a condition for accepting a credit card as payment for a consumer credit transaction or rental-purchase agreement.

AB587, s. 23 Section 23. 425.102 of the statutes is amended to read:

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: