H. B. 2315
(By Delegates Manuel, Kessel, Sorah,
Walters and Rutledge)
[Introduced March 1, 1993; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact section one hundred two, article one,
chapter forty-six-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; to further
amend said chapter forty-six-a by adding thereto a new
article, designated article six-e; and to amend and reenact
section thirty-two, article three, chapter sixty-one of said
code, all relating to the West Virginia consumer credit
protection act; creating the West Virginia rent-to-own
consumer protection act; consumer protection in rent-to-own
transactions for goods to be used for personal, family or
household purposes; providing civil penalties for
violations; and decriminalizing certain conversions of
property which are the subject of rent-to-own transactions.
Be it enacted by the Legislature of West Virginia:
That section one hundred two, article one, chapter forty-
six-a of the code of West Virginia, one thousand nine hundred
thirty-one, as amended, be amended and reenacted; that saidchapter forty-six-a, be further amended by adding thereto a new
article, designated article six-e; and that section thirty-two,
article three, chapter sixty-one of said code be amended and
reenacted, all to read as follows:
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT
AND PROTECTION ACT.
ARTICLE 1. SHORT TITLE, DEFINITIONS AND GENERAL PROVISIONS.
§46A-1-102. General definitions.
In addition to definitions appearing in subsequent articles,
in this chapter:
(1) "Actuarial method" means the method, defined by rules
adopted by the commissioner, of allocating payments made on a
debt between principal or amount financed and loan finance charge
or sales finance charge pursuant to which a payment is applied
first to the accumulated loan finance charge or sales finance
charge and the balance is applied to the unpaid principal or
unpaid amount financed.
(2) "Agreement" means the bargain of the parties in fact as
found in their language or by implication from other
circumstances including course of dealing or usage of trade or
course of performance. A "consumer credit agreement" is an
agreement where credit is granted.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing or manufacture of agricultural products by a natural
person who cultivates, plants, propagates or nurtures theagricultural products. "Agricultural products" includes
agricultural, horticultural, viticultural and dairy products,
livestock, wildlife, poultry, bees, forest products, fish and
shellfish, and any products thereof, including processed and
manufactured products, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Amount financed" means the total of the following items
to the extent that payment is deferred:
(a) The cash price of the goods, services or interest in
land, less the amount of any down payment whether made in cash or
in property traded in;
(b) The amount actually paid or to be paid by the seller
pursuant to an agreement with the buyer to discharge a security
interest in or a lien on property traded in; and
(c) If not included in the cash price:
(i) Any applicable sales, use, privilege, excise or
documentary stamp taxes;
(ii) Amounts actually paid or to be paid by the seller for
registration, certificate of title or license fees; and
(iii) Additional charges permitted by this chapter.
(5) "Average daily balance" in a billing cycle for which a
sales finance charge or loan finance charge is made is the sum
of the amount unpaid each day during that cycle divided by the
number of days in that cycle. The amount unpaid on a day is
determined by adding to the balance, if any, unpaid as of thebeginning of that day all purchases and other debits and
deducting all payments and other credits made or received as of
that day.
(6) The "cash price" of goods, services or an interest in
land means the price at which the goods, services or interest in
land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include (a) applicable
sales, use, privilege, and excise and documentary stamp taxes,
(b) the cash price of accessories or related services such as
delivery, installation, servicing, repairs, alterations and
improvements, and (c) amounts actually paid or to be paid by the
seller for registration, certificate of title, or license fees.
(7) "Closing costs" with respect to a debt secured by an
interest in land include:
(a) Fees or premiums for title examination, title insurance
or similar purposes including surveys;
(b) Fees for preparation of a deed, deed of trust, mortgage,
settlement statement or other documents;
(c) Escrows for future payments of taxes and insurance;
(d) Official fees and fees for notarizing deeds and other
documents;
(e) Appraisal fees; and
(f) Credit reports.
(8) "Code" means the official code of West Virginia, one
thousand nine hundred thirty-one, as amended.
(9) "Commercial facsimile transmission" means the electronicor telephonic transmission in the state to a facsimile device to
encourage a person to purchase goods, realty or services.
(10) "Commissioner" means the commissioner of banking of
West Virginia.
(11) "Conspicuous": A term or clause is conspicuous when it
is so written that a reasonable person against whom it is to
operate ought to have noticed it. Whether a term or clause is
conspicuous or not is for decision by the court.
(12) "Consumer" means a natural person who incurs debt
pursuant to a consumer credit sale or a consumer loan.
(13) (a) Except as provided in
paragraph paragraphs (b)
and
(c), "consumer credit sale" is a sale of goods, services or an
interest in land in which:
(i) Credit is granted either by a seller who regularly
engages as a seller in credit transactions of the same kind or
pursuant to a seller credit card;
(ii) The buyer is a person other than an organization;
(iii) The goods, services or interest in land are purchased
primarily for a personal, family, household or agricultural
purpose;
(iv) Either the
debt obligation required to obtain ownership
of the goods is payable in installments or a sales finance charge
is made; and
(v) With respect to a sale of goods or services, the amount
financed does not exceed twenty-five thousand dollars.
(b) "Consumer credit sale" does not include a sale in whichthe seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement.
(c) "Consumer credit sale" does not include a rent-to-own
transaction subject to the provisions of article six-d of this
chapter.
(d) This definition of "consumer credit sale" shall be
liberally construed to apply protections provided by this chapter
to all transactions regarding goods to be used for personal,
family or household purposes by construing every transaction
regarding property for personal, family or household purposes in
which a natural person who is not in the business of selling or
otherwise dealing with such goods acquires or has the right to
acquire ownership of the property and in which the person
acquiring or with the right to acquire ownership has the right to
use or possession of the property during the transaction, to be
one of the following:
(i) A consumer credit sale as defined by this section;
(ii) A rent-to-own transaction as defined in subsection (a),
section one hundred two, article six-d of this chapter; or
(iii) A transaction which is excluded from being a rent-to-
own transaction by subsection (b), section one hundred two,
article six-d of this chapter unless such excluded transaction
would otherwise be a consumer credit sale.
(14) (a) "Consumer lease" means a lease of goods:
(i) Which a lessor regularly engaged in the business of
leasing makes to a person, other than an organization, who takesunder the lease primarily for a personal, family, household or
agricultural purpose;
(ii) In which the amount payable under the lease does not
exceed twenty-five thousand dollars; and
(iii) Which is for a term exceeding four months.
(b) "Consumer lease" does not include a lease made pursuant
to a lender credit card or similar arrangement.
(15) "Consumer loan" is a loan made by a person regularly
engaged in the business of making loans in which:
(a) The debtor is a person other than an organization;
(b) The debt is incurred primarily for a personal, family,
household or agricultural purpose;
(c) Either the debt is payable in installments or a loan
finance charge is made; and
(d) Either the principal does not exceed twenty-five
thousand dollars or the debt is secured by an interest in land.
(16) "Cosigner" means a natural person who assumes liability
for the obligation on a consumer credit sale or consumer loan
without receiving goods, services or money in return for the
obligation or, in the case of a revolving charge account or
revolving loan account of a consumer, without receiving the
contractual right to obtain extensions of credit under the
account. The term cosigner includes any person whose signature
is requested as a condition to granting credit to a consumer or
as a condition for forbearance on collection of a consumer's
obligation that is in default. The term cosigner does notinclude a spouse whose signature is required to perfect a
security interest. A person who meets the definition in this
paragraph is a "cosigner" whether or not the person is designated
as such on the credit obligation.
(17) "Credit" means the privilege granted by a
seller or
other creditor to a debtor
or other obligated person to defer
payment of debt,
to defer payment which will or may result in
ownership of the goods and services by the debtor or other
obligated person or to incur debt and defer its payment.
(18) "Earnings" means compensation paid or payable to an
individual or for his account for personal services rendered or
to be rendered by him, whether denominated as wages, salary,
commission, bonus or otherwise, and includes periodic payments
pursuant to a pension, retirement or disability program.
(19) "Facsimile device" means a machine that receives and
copies reproductions or facsimiles of documents or photographs
that have been transmitted electronically or telephonically over
telecommunications lines.
(20) "Federal Consumer Credit Protection Act" means the
"Consumer Credit Protection Act" (Public Law 90-321; 82 Stat.
146), as amended, and includes regulations issued pursuant to
that act.
(21) "Goods" includes goods not in existence at the time the
transaction is entered into and gift and merchandise
certificates, but excludes money, chattel paper, documents of
title and instruments.
(22) "Home solicitation sale" means a consumer credit sale
in excess of twenty-five dollars in which the buyer receives a
solicitation of the sale at a place other than the seller's
business establishment at a fixed location and the buyer's
agreement or offer to purchase is there given to the seller or a
person acting for the seller. The term does not include a sale
made pursuant to a preexisting open-end credit account with the
seller in existence for at least three months prior to the
transaction, a sale made pursuant to prior negotiations between
the parties at the seller's business establishment at a fixed
location, a sale of motor vehicles, mobile homes or farm
equipment or a sale which may be rescinded under the Federal
Truth in Lending Act (being Title I of the Federal Consumer
Credit Protection Act). A sale which would be a home
solicitation sale if credit were extended by the seller is a home
solicitation sale although the goods or services are paid for in
whole or in part by a consumer loan in which the creditor is
subject to claims and defenses arising from the sale.
(23) Except as otherwise provided, "lender" includes an
assignee of the lender's right to payment but use of the term
does not in itself impose on an assignee any obligation of the
lender.
(24) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using
a credit card, letter of credit, or other credit confirmation oridentification in transactions out of which debt arises:
(a) By the lender's honoring a draft or similar order for
the payment of money drawn or accepted by the consumer;
(b) By the lender's payment or agreement to pay the
consumer's obligations; or
(c) By the lender's purchase from the obligee of the
consumer's obligations.
(25) "Loan" includes:
(a) The creation of debt by the lender's payment of or
agreement to pay money to the consumer or to a third party for
the account of the consumer other than debts created pursuant to
a seller credit card;
(b) The creation of debt by a credit to an account with the
lender upon which the consumer is entitled to draw immediately;
(c) The creation of debt pursuant to a lender credit card or
similar arrangement; and
(d) The forbearance of debt arising from a loan.
(26) (a) "Loan finance charge" means the sum of (i) all
charges payable directly or indirectly by the debtor and imposed
directly or indirectly by the lender as an incident to the
extension of credit, including any of the following types of
charges which are applicable: Interest or any amount payable
under a point, discount, or other system of charges, however
denominated, premium or other charge for any guarantee or
insurance protecting the lender against the consumer's default or
other credit loss; and (ii) charges incurred for investigatingthe collateral or credit worthiness of the consumer or for
commissions or brokerage for obtaining the credit, irrespective
of the person to whom the charges are paid or payable, unless the
lender had no notice of the charges when the loan was made. The
term does not include charges as a result of default, additional
charges, delinquency charges or deferral charges.
(b) If a lender makes a loan to a consumer by purchasing or
satisfying obligations of the consumer pursuant to a lender
credit card or similar arrangement, and the purchase or
satisfaction is made at less than the face amount of the
obligation, the discount is not part of the loan finance charge.
(27) "Merchandise certificate" or "gift certificate" means
a writing issued by a seller or issuer of a seller credit card,
not redeemable in cash and usable in its face amount in lieu of
cash in exchange for goods or services.
(28) "Official fees" means:
(a) Fees and charges prescribed by law which actually are or
will be paid to public officials for determining the existence of
or for perfecting, releasing, terminating or satisfying a
security interest related to a consumer credit sale or consumer
loan; or
(b) Premiums payable for insurance or fees escrowed in a
special account for the purpose of funding self-insurance or its
equivalent in lieu of perfecting a security interest otherwise
required by the creditor in connection with the sale, lease or
loan, if such premium or fee does not exceed the fees and chargesdescribed in paragraph (a) which would otherwise be payable.
(29) "Organization" means a corporation, government or
governmental subdivision or agency, trust, estate, partnership,
cooperative or association.
(30) "Payable in installments" means that payment is
required or permitted by agreement to be made in (a) two or more
periodic payments, excluding a down payment, with respect to a
debt arising from a consumer credit sale pursuant to which a
sales finance charge is made, (b) four or more periodic payments,
excluding a down payment, with respect to a debt arising from a
consumer credit sale pursuant to which no sales finance charge is
made, or (c) two or more periodic payments with respect to a debt
arising from a consumer loan. If any periodic payment other than
the down payment under an agreement requiring or permitting two
or more periodic payments is more than twice the amount of any
other periodic payment, excluding the down payment, the consumer
credit sale or consumer loan is "payable in installments."
(31) "Person" or "party" includes a natural person or an
individual, and an organization.
(32) "Person related to" with respect to an individual means
(a) the spouse of the individual, (b) a brother, brother-in-law,
sister or sister-in-law of the individual, (c) an ancestor or
lineal descendant of the individual or his spouse, and (d) any
other relative, by blood or marriage, of the individual or his
spouse who shares the same home with the individual. "Person
related to" with respect to an organization means (a) a persondirectly or indirectly controlling, controlled by or under common
control with the organization, (b) an officer or director of the
organization or a person performing similar functions with
respect to the organization or to a person related to the
organization, (c) the spouse of a person related to the
organization, and (d) a relative by blood or marriage of a person
related to the organization who shares the same home with him.
(33) "Precomputed loan." A loan, refinancing or
consolidation is "precomputed" if the debt is expressed as a sum
comprising the principal and the amount of the loan finance
charge computed in advance.
(34) "Precomputed sale." A sale, refinancing or
consolidation is "precomputed" if the debt is expressed as a sum
comprising the amount financed and the amount of the sales
finance charge computed in advance.
(35) "Presumed" or "presumption" means that the trier of
fact must find the existence of the fact presumed unless and
until evidence is introduced which would support a finding of its
nonexistence.
(36) "Principal" of a loan means the total of:
(a) The net amount paid to, receivable by or paid or payable
for the account of the debtor;
(b) The amount of any discount excluded from the loan
finance charge; and
(c) To the extent that payment is deferred:
(i) Amounts actually paid or to be paid by the lender forregistration, certificate of title, or license fees if not
included in (a); and
(ii) Additional charges permitted by this chapter.
(37) "Revolving charge account" means an agreement between
a seller and a buyer by which (a) the buyer may purchase goods or
services on credit or a seller credit card, (b) the balances of
amounts financed and the sales finance and other appropriate
charges are debited to an account, (c) a sales finance charge if
made is not precomputed but is computed periodically on the
balances of the account from time to time, and (d) there is the
privilege of paying the balances in installments.
(38) "Revolving loan account" means an arrangement between
a lender and a consumer including, but not limited to, a lender
credit card or similar arrangement, pursuant to which (a) the
lender may permit the consumer to obtain loans from time to time,
(b) the unpaid balances of principal and the loan finance and
other appropriate charges are debited to an account, (c) a loan
finance charge if made is not precomputed but is computed
periodically on the outstanding unpaid balances of the principal
of the consumer's account from time to time, and (d) there is the
privilege of paying the balances in installments.
(39) "Sale of goods" includes any agreement in the form of
a bailment or lease of goods if the bailee or lessee agrees to
pay as compensation for use a sum substantially equivalent to or
in excess of the aggregate value of the goods involved and it is
agreed that the bailee or lessee will become, or for no other ora nominal consideration has the option to become, the owner of
the goods upon full compliance with his obligations under the
agreement.
(40) "Sale of an interest in land" includes a lease in which
the lessee has an option to purchase the interest and all or a
substantial part of the rental or other payments previously made
by him are applied to the purchase price.
(41) "Sale of services" means furnishing or agreeing to
furnish services and includes making arrangements to have
services furnished by another.
(42) "Sales finance charge" means the sum of (a) all charges
payable directly or indirectly by the buyer and imposed directly
or indirectly by the seller or issuer of a seller credit card as
an incident to the extension of credit, including any of the
following types of charges which are applicable: Time-price
differential, however denominated, including service, carrying or
other charge, premium or other charge for any guarantee or
insurance protecting the seller against the buyer's default or
other credit loss, and (b) charges incurred for investigating the
collateral or credit worthiness of the buyer or for commissions
or brokerage for obtaining the credit, irrespective of the person
to whom the charges are paid or payable; unless the seller had no
notice of the charges when the credit was granted. The term does
not include charges as a result of default, additional charges,
delinquency charges or deferral charges. If the seller or issuer
of a seller credit card purchases or satisfies obligations of theconsumer and the purchase or satisfaction is made at less than
the face amount of the obligation, the discount is not part of
the sales finance charge.
(43) Except as otherwise provided, "seller" includes an
assignee of the seller's right to payment but use of the term
does not in itself impose on an assignee any obligation of the
seller.
(44) "Seller credit card" means an arrangement pursuant to
which a person gives to a buyer or lessee the privilege of using
a credit card, letter of credit, or other credit confirmation or
identification primarily for the purpose of purchasing or leasing
goods or services from that person, that person and any other
person or persons, a person related to that person, or others
licensed or franchised or permitted to do business under his
business name or trade name or designation or on his behalf.
(45) "Services" includes (a) work, labor and other personal
services, (b) privileges with respect to transportation, use of
vehicles, hotel and restaurant accommodations, education,
entertainment, recreation, physical culture, hospital
accommodations, funerals, cemetery accommodations, and the like,
and (c) insurance.
(46) "Supervised financial organization" means a person,
other than a supervised lender or an insurance company or other
organization primarily engaged in an insurance business:
(a) Organized, chartered or holding an authorization
certificate under the laws of this state or of the United Stateswhich authorizes the person to make consumer loans; and
(b) Subject to supervision and examination with respect to
such loans by an official or agency of this state or of the
United States.
(47) "Supervised lender" means a person authorized to make
or take assignments of supervised loans.
(48) "Supervised loan" means a consumer loan made by other
than a supervised financial organization, including a loan made
pursuant to a revolving loan account, where the principal does
not exceed two thousand dollars, and in which the rate of the
loan finance charge exceeds eight percent per year as determined
according to the actuarial method.
ARTICLE 6E. CONSUMER PROTECTION--RENT-TO-OWN TRANSACTIONS.
§46A-6E-101. Short title.
This article may be known and cited as "The West Virginia
Rent-To-Own Consumer Protection Act."
§46A-6E-102. Definitions; exclusions; applicability of other
law; inapplicability of other law.
(a)
Definitions. -- Notwithstanding the other provision of
this chapter, for the purposes of this article, unless a
different meaning is plainly required by this article:
(1) "Consumer" means a natural person who is not a lessor
who is solicited to enter into a rent-to-own transaction or who
acquires or seeks to acquire possession, use or ownership of
goods to be used primarily for personal, family or household
purposes pursuant to a rent-to-own transaction governed by thisarticle.
(2) "Damage waiver" means the voiding or disregard of any
obligation on the part of the lessee to pay the value of the
goods or to make payments pursuant to the rent-to-own transaction
in the event of loss or damage to the goods in excess of normal
wear and tear or the insurance of the value of the goods or of
payments pursuant to the rent-to-own transaction in the event of
loss or damage to the goods in excess of normal wear and tear.
(3) "Finance charge" means the difference between the retail
value and the total of payments.
(4) "Goods" means personal property excluded by subsection
(b) of this section.
(5) "Lessor" means a person who, in the ordinary course of
business, provides goods to consumers, offers to provide goods to
consumers, or acts as an agent to offer or provide goods to
consumers, pursuant to a rent-to-own transaction governed by this
article.
(6) "Lessee" means a consumer who acquires or seeks to
acquire possession, use or ownership of goods to be used
primarily for personal, family or household purposes pursuant to
a rent-to-own transaction governed by this article.
(7) "Ownership" means transferrable legal title to goods
whether or not evidenced or required to be evidenced by a
document.
(8) "Period" means a week, a month or other duration of time
in a rent-to-own transaction during which the lessee has a rightto use or possession of goods and which is paid for by one
periodic payment.
(9) "Periodic payment" means the payment required from the
lessee for the lessee to have the right to each successive time
period of possession of the goods. The periodic payment shall
not include any applicable sales, use, privilege, excise or
documentary stamp tax payable upon sale or other transfer of
goods to a consumer from a person or entity in the business of
making such transfers except as provided by the disclosure
requirements of this article.
(10) "Premises" means a particular physical place of
business open to the public. Unless the context requires
otherwise, "premises" means the particular physical place of
business of a lessor visited by the consumer or with which a
consumer dealt, unless all communications in question with the
lessee arose out of a communication to the lessee from the lessor
by telephone in which case "premises" shall be the closest
physical place of business of the lessor open to the public.
(11) "Printed advertisement" includes, without limitation,
an advertisement in or comprised of a newspaper, magazine, flyer,
handbill, handout, transmission to a facsimile device, poster or
other similar form.
(12) "Rent-to-own transaction" means a transaction other
than a transaction excluded from coverage by subsection (b) of
this section, in which a consumer acquires the possession or use
of goods to be used primarily for personal, family or householdpurposes, and in which the consumer has the right, but is not
required, to acquire ownership of the goods.
(13) "Retail value" means the price at which goods would
change hands in the particular market area at the time of the
rent-to-own transaction in exchange for cash, check or other
legal tender, between a willing seller who has the knowledge of
a reasonable seller of the relevant facts, who is under no
compulsion to sell to a particular buyer and who is in the
business of selling such goods and a willing buyer who has the
knowledge of a reasonable consumer of the relevant facts and who
is under no compulsion to buy or to buy from a particular seller:
Provided,
That "retail value" does not mean the price at which
goods would change hands through catalogue, mail order,
telemarketing or other similar marketing technique in which the
supplier of the goods does not have a place of business in the
market area where such transactions occur. The retail value
shall not include any applicable sales, use, privilege, excise or
documentary stamp tax payable upon sale or other transfer of
goods to a consumer from a person or entity in the business of
making such transfers except as provided by the disclosure
requirements of this article.
Prima facie evidence of the retail value of a good includes,
but is not limited to, a bona fide retail sale of goods of
substantially the same quality and characteristics in the same
market area at the time of the rent-to-own transaction in
exchange for cash, check or other legal tender to a willingconsumer buyer who has the knowledge of a reasonable consumer of
the relevant facts and who is under no compulsion to buy or to
buy from a particular seller from a willing seller who is in the
business of selling such goods, who has the knowledge of a
reasonable seller of the relevant facts, who is under no
compulsion to sell to a particular buyer, and who has no
connection with the lessor of the goods in question:
Provided,
That a sale of goods through catalogue, mail order, telemarketing
or other similar marketing technique in which the supplier of the
goods does not have a place of business in the market area where
such transactions occur would not alone constitute such prima
facie evidence.
(14) "Total of payments" means the total of all scheduled
payments required to be paid by the lessee in order for the
lessee to acquire ownership of all of the goods which are the
subject to one rent-to-own transaction pursuant to the rent-to-
own transaction. The total of payments includes, without
limitation, all periodic payments and delivery charges. The
total of payments does not include late charges, pickup charges
and other charges which do not have to be paid by the lessee
without the happening of a contingency. The total of payments
also does not include any sales, use, privilege, excise or
documentary transfer tax or damage waiver or casualty insurance
charges except as provided by the disclosure requirements of this
article.
(15) "Written agreement" means a written document containingor evidencing the terms of a rent-to-own transaction.
(b) Exclusions. -- Notwithstanding the provisions of
subsection (a) of this section, the further provisions of this
chapter, chapter forty-six of this code, and other law, a
transaction is not a rent-to-own transaction subject to the
provisions of this article if it is a transaction:
(1) In which a national bank or a state chartered bank is a
party if it is subject to the Federal Truth in Lending Act or the
Federal Consumer Leasing Act and the regulations promulgated
pursuant thereto;
(2) In which all the goods which are the subject matter of
the transaction are vehicles as defined in section one, article
one, chapter seventeen-a of this code;
(3) In which all of the goods which are the subject of the
transaction are two-way telecommunications equipment;
(4) In which all of the goods which are the subject of the
transaction are musical instruments if the transaction is subject
to the Federal Truth in Lending Act or the regulations
promulgated pursuant thereto.
(c) Applicability of other law. -- Notwithstanding the
provisions of other law:
(1) A transaction that is a rent-to-own transaction for the
purposes of this article is a writing for the purposes of
sections one hundred two, and one hundred thirty-seven of article
two of this chapter;
(2) A transaction that is a rent-to-own transaction for thepurposes of this article is a consumer lease for the purposes of
section one hundred ten of article two of this chapter;
(3) A transaction that is a rent-to-own transaction for the
purposes of this article is a transaction subject to the
provisions of sections one hundred thirteen, one hundred
fourteen, one hundred sixteen, one hundred seventeen, one hundred
eighteen, one hundred twenty, one hundred twenty-one, one hundred
thirty, one hundred thirty-one, and one hundred thirty-six of
article two of this chapter, article six of this chapter and
section one hundred nine, one hundred eleven and one hundred
fifteen of article seven of this chapter;
(4) For the purposes of section one hundred twenty-two
through one hundred twenty-nine of article two of this chapter a
lessee for the purposes of this article is a consumer, an
obligation pursuant to a rent-to-own transaction for the purposes
of this article is a claim and a lessor for the purposes of this
article is a creditor and a debt collector.
(5) A transaction that is a rent-to-own transaction for the
purposes of this article is a transaction subject to the
provisions of section one hundred fourteen of article two of this
chapter;
(d) Inapplicability of other law. -- Notwithstanding the
provisions of other law, a transaction that is a rent-to-own
transaction for the purposes of this article is not:
(1) A sale for the purposes of article two or a secured
transaction for the purposes of article nine of chapter forty-sixof this code;
(2) A consumer credit sale as defined in section one hundred
two, article one of this chapter;
(3) A consumer lease for the purposes of subdivision (a),
subsection thirteen, section one hundred two, article one of
this chapter.
§46A-6E-103. Requirement for rent-to-own transactions --
Terminable by lessee only; no penalty.
(a) A rent-to-own transaction shall be terminable at will at
the end of each period by the lessee.
(b) A rent-to-own transaction is only terminable by the
lessor pursuant to the procedures provided in this article and is
so terminable only if the lessee fails to timely make the
periodic payments necessary to acquire ownership or fails to
comply with another material provision of the transaction.
(c) A lessee exercising the lessee's option to terminate a
rent-to-own transaction shall not be liable to perform any other
duties or for payment of any money other than:
(1) The payment of unpaid payments and charges accrued
before the lessee notifies the lessor of the lessee's termination
of the transaction and either returns the goods to the lessor or
makes the goods available for pick up by the lessor;
(2) The payment of a reasonable pickup charge if one was
provided in the written agreement signed by the lessee at the
initiation of the transaction and the lessee does not return the
goods to the lessor; and
(3) To hold the goods with reasonable care for a time
sufficient to permit the seller to pick up the goods where the
lessor is to pick up the goods.
§46A-6E-104. Requirement for rent-to-own transactions -- Normal
wear and tear.
For no charge to the lessee other than the periodic payment
the lessor shall be responsible for maintaining the goods that
are the subject of a rent-to-own transaction against normal wear
and tear until the lessee obtains ownership of the goods.
§46A-6E-105. Requirement for rent-to-own transactions --
Reinstatement.
(a) A lessee who fails to timely make one or more periodic
payments, has the right to reinstate the original rent-to-own
transaction without losing any right or option of the lessee
under the rental-purchase agreement within sixty days after the
expiration of the last period for which the lessee made a timely
payment:
Provided,
That if a lessee has made more than forty
percent of the regular payments required to obtain ownership of
the goods, pursuant to the rent-to-own transaction, the lessee
shall have ninety days to reinstate the rental-purchase
agreement.
(b) Before reinstating a rental-purchase agreement, a lessor
may require a lessee to pay any unpaid periodic payments, any
unpaid late charges, a delivery charge if redelivery of the
property is necessary and a delivery charge was stated in the
written agreement, and a pickup charge if the lessee did notreturn possession of the goods to the lessor at the lessor's
place of business and the lessor has obtained return of the goods
at the lessor's expense.
(c) If reinstatement occurs pursuant to this section, the
lessor shall provide the lessee with the same goods leased by the
lessee prior to the reinstatement if the goods are available or,
if that property is not available to the lessor, substitute
property that is of no less quality and condition. If substitute
property is provided, the lessor shall provide the lessee with
all of the disclosures required by this article for rent-to-own
transactions.
§46A-6E-106. Requirement for rent-to-own transactions --
Lessee's rights to ownership of the goods.
The lessee owns the goods when the lessee has paid all of
the periodic payments required by a rent-to-own transaction
together with any other charges authorized by law which have been
lawfully imposed in the transaction.
§46A-6E-107. Requirement for rent-to-own transactions -- Buy
out.
The lessee, after the initial payment, shall have the option
to buy out the rent-to-own transaction and obtain ownership
before the scheduled end of the rent-to-own transaction by paying
only:
(1) A portion of the periodic payments which have not yet
become payable, subject to the limitation provided by section one
hundred twenty-eight of this article;
(2) All periodic payments and other charges authorized by
law which have already become due and which may be lawfully
imposed in the transaction; and
(3) The amount of any documentary or other fee charged by a
governmental entity to transfer ownership or proof of ownership
if the lessees obligation to pay that fee was disclosed in the
written agreement subject to the limitations in this article on
such fee.
§46A-6E-108. Requirement for rent-to-own transactions --
Lessor's rights and duties upon lessee's default.
(a) In the case of a transaction in which the payment period
is seven days or less, the lessor may deliver a notice of the
lessee's right to cure default no earlier than the seventh day
after the due date of an unpaid periodic payment.
(b) In the case of a transaction in which the payment period
is more than seven days, the lessor may deliver a notice of the
lessee's right to cure default no earlier than the fifteenth day
after the due date of an unpaid periodic payment.
(c) If the lessee pays to the lessor all payments properly
stated to be unpaid in the notice of right to cure default before
the day upon which the lessor may take further action to collect
the payment or seek return of the goods, then the rent-to-own
transaction shall continue in full force and effect as if the
payment were timely made. If the lessor agrees to withhold
taking further action to collect the payment or seek return of
the goods in exchange for a payment of a periodic payment or apart thereof, then the notice of right to cure default and the
notice of right to reinstate must again be delivered to the
lessee before the further actions to collect the payments or seek
return of the goods can be taken.
(d) A notice of right to cure default must state the lawful
amount of payment which must be made to cure the lessee's default
and the date by which the payment must be made. In addition, a
notice of right to cure default shall fully and clearly notify
the lessee of the lessee's rights to cure default and to
reinstate.
(e) Prior to delivery of a notice of right to cure default,
as provided in this section, the lessor may not communicate with
the lessee and request that the lessee return the goods or make
them available for pick up by the lessor unless the lessor also
communicates to the lessee that the lessee has the right to make
the unpaid rental payment and keep the goods and the lessee's
rights under the contract.
(f) Except as provided in the next subsection a lessor shall
not:
(1) Commence any court action against the lessee regarding
the transaction; or
(2) Communicate to the lessee that the lessee must return
the goods or that the lessor will not accept cure of default; or
(3) Obtain possession of the goods without the express
consent of the lessee; or
(4) Take self help action authorized by the provisions ofthis article to regain possession of the goods without the
consent of the lessee until the fifteenth day following the day
upon which a notice of right to cure default and right to
reinstatement is delivered to a lessee in a rent-to-own
transaction in which the rental period is seven days or less, or
until the thirtieth day following the day upon which a notice of
right to cure default and right to reinstatement is delivered to
a lessee in a rent-to-own transaction in which the rental period
is longer than seven days.
(g) Where a lessee has paid more than forty percent of the
total of payments in a rent-to-own transaction, the amount of
time provided in the previous section for transactions with a
rental period of seven days or less shall be twenty-one days, and
the amount of time provided in the previous section for
transactions with a rental period of more than seven days shall
be forty-five days.
(h) The lessor may not file an action in court against a
lessee regarding a rent-to-own transaction unless the lessor
files with the initial pleading a photocopy or an impression copy
of the notice required by this section and an affidavit that the
notice of right to cure default was delivered to the lessee and
the date and means of such delivery which affidavit must be made
by a person who made the delivery, or witnessed the delivery.
(i) The self help action that a lessor may take to regain
possession of the goods without the consent of the lessee is the
same as that which a secured party may take to regain possessionof goods after a default pursuant to chapter forty-six of this
code.
(j) If the lessee is in default, has been given proper
notice of right to cure that default as provided in this section
and has failed to either cure default timely or timely tender the
payment's necessary to reinstate the transaction, then the lessor
is entitled to one of the following:
(1) Return of the goods, plus all charges authorized by law
which have been lawfully imposed in the transaction other than
periodic payments, plus court costs and court fees if they are
actually incurred, plus the cost to repair any damage done to the
goods in excess of normal wear and tear up to the difference in
value between the goods with the damage and without the damage,
plus all unpaid periodic payments which became payable before the
earliest of the following dates:
(A) The date upon which the lessee made the goods available
for the lessor to obtain possession of the goods and notified the
lessor that the lessor could come and pick up the goods; or
(B) The last date upon which the lessee could have cured
default of the rent-to-own transaction if the lessor had provided
the lessee with the lessee's notice of right to cure default on
the first day allowed by this section.
(2) Court costs and fees, if they actually incurred, plus
the amount for which the lessee could have obtained ownership
pursuant to a buy out on the date upon which the lessor could
have cured default of the rent-to-own transaction if the lessorhad provided the lessee with the lessee's notice of right to cure
default on the first day allowed by this section.
(k) The director of the division of consumer protection of
the office of the attorney general shall issue an approved form
for notice of right to cure default which shall comply with the
provisions of this article. Such approved form may be
disapproved by the issuance of a new approved form at the
discretion of the director. Such form shall be presumed to be in
proper form and give proper notice of the lessee's rights if it
was an approved form at the time it was lawfully delivered:
Provided,
That the use of such form shall not give rise to a
presumption that the information filled in by the lessor for the
particular rent-to-own transaction in which the form is used is
proper.
§46A-6E-109. Requirement for rent-to-own transactions --
Transfer of warranty.
If there is any warranty on the goods that are the subject
of a rent-to-own transaction which warranty is transferrable to
the lessee when the lessee obtains ownership of the goods, then
the warranty must be transferred and the lessee must be advised
of the transfer and of the maker of the warranty.
§46A-6E-110. Requirement for rent-to-own transactions --
Written agreement; copy to lessee.
A lessor may not request compliance with or enforce the
provisions of a rent-to-own transaction unless the provision was
set out in a written agreement signed by all of the parties. Thelessee must receive a copy of every written agreement at the time
the parties enter into the rent-to-own transaction.
§46A-6E-111. General disclosure requirements.
(a) The disclosures required by this article shall be made
by the lessor.
(b) In a transaction involving more than one lessor, only
one lessor is required to make the disclosures required by this
article:
Provided,
That the name of all the lessors shall be
disclosed where the name of the lessor is required to be
disclosed.
(c) A lessor may disclose information that is not required
by this article if the additional information is not stated, used
or placed in a manner that will contradict, obscure or distract
attention from the required information.
§46A-6E-112. Disclosures -- Price tag.
(a) The disclosures required by this section shall be
provided for all goods which are displayed by a lessor.
(b) The disclosures in subsection (c) of this section shall
be provided on a label or tag that is either on the front of the
goods, or is visible from the front of the goods and touching or
immediately adjacent to the goods. The disclosures in subsection
(c) of this section shall be made in clear type or lettering that
is at least three quarters of an inch high.
(c)(1) Retail value designated as "retail value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise ordocumentary stamp tax unless such tax is separately and
contiguously disclosed, using the words "periodic payment
amount":
Provided,
That a dollar sign may be substituted for the
term "amount" and the term "weekly," "biweekly," "semimonthly" or
"monthly" as appropriate for the particular rent-to-own
transaction may be substituted for the term "periodic";
(3) Period designated as "period":
Provided,
That this
disclosure does not have to be separately made if the calendar
length of the period is substituted for the term "periodic" in
the disclosure of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, designated "number of
payments";
(5) Total of payments, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, designated as "total of payments";
(6) The term "used" or "previously rented" unless the goods
are new;
(7) The difference between the total of payments and the
retail value designated as "finance charge"; and
(8) The annual percentage rate calculated using the retail
value, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
§46A-6E-113. Disclosures -- Written agreement.
(a) In every rent-to-own transaction the disclosures
required by this section shall be made on a written agreement.
(b) The disclosures in subsection (d):
(1) Shall be made in bold face type that is no smaller than
ten point type;
(2) Shall be made on the same page as the lessee's
signature; and
(3) Shall be grouped together in contiguous columns, lines,
or sentences.
(c) The disclosures in subsection (e) shall be made in type
that is no smaller and no less conspicuous than the type used for
the other parts of the body of the written agreement.
(d)(1) Retail value of each good designated as "retail
value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, using the words "periodic payment
amount":
Provided,
That a dollar sign may be substituted for the
term "amount" and the term "weekly," "biweekly," "semimonthly" or
"monthly" as appropriate for the particular rent-to-own
transaction may be substituted for the term "periodic";
(3) Period designated as "period":
Provided,
That this
disclosure does not have to be separately made if the calendar
length of the period is substituted for the term "periodic" in
the disclosure of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, designated "number of
payments";
(5) Total of payments, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, designated as "total of payments";
(6) The difference between the total of payments and the
retail value designated as "finance charge";
(7) Whether the goods are "new," "used" or "previously
rented"; and
(8) The annual percentage rate calculated using the retail
value, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
(9) Where a lessee enters into a rent-to-own transaction for
goods that were the subject of a previous rent-to-own transaction
between the same lessee, or one of the same lessees, and the same
lessor, or the lessor's predecessor, then the total of periodic
payments made on the goods in question pursuant to the previous
rent-to-own transaction must be credited against and disclosed as
a credit against the total of payments of the new rent-to-own
transaction.
(10) Where a lessee is solicited to enter into a rent-to-own
transaction in which the lessee was the lessee or one of the
lessees and the lessor or the lessor's predecessor was a lessorin a previous transaction or transactions by the representation
that the lessee will have to pay less on the new transaction
because the lessee has made payments on the previous rent-to-own
transaction for goods which were returned to the lessor and are
not included in the new transaction, then the amount of the
reduction in payments in the new transaction shall be disclosed
as a credit of the payments made on the previous transaction
against the total of payments of the new transaction.
(e)(1) Date when the agreement to enter into the rent-to-own
transaction was made or the date of the first performance of any
obligation of or to be included in the rent-to-own transaction by
any party, whichever date is earlier;
(2) Date of the signatures of the parties;
(3) The names of all parties to the rent-to-own transaction;
(4) The terms of the rent-to-own transaction including,
without limitation, all of the requirements of this article for
rent-to-own transactions;
(5) Whether the lessor requires lessees to purchase a damage
waiver or insurance for that particular type or value of goods:
Provided,
That this disclosure is only required to be made if the
lessor offers a damage waiver term to the lessee or if a written
agreement or the form which is used for a written agreement
provides for a damage waiver.
(6) That the lessee is not required to acquire the damage
waiver or insurance from the lessor and may instead purchase
insurance or other equivalent protection from another source atany time during the rent-to-own transaction:
Provided,
That this
disclosure is only required to be made if the lessor offers a
damage waiver term to the lessee or if a written agreement or the
form which is used for a written agreement provides for a damage
waiver, or if a damage waiver is lawfully required.
(7) If the lessor represents that any transferrable
manufacturer's warranty will be transferred to the lessee when
the lessee obtains ownership, then the lessor must disclose
whether there will be a transferrable manufacturer's warranty on
the goods which are the subject of the particular rent-to-own
transaction at the time ownership of the goods would be
transferred to the lessee if the lessee timely paid the scheduled
periodic payments.
(f) No term or provision may be disclosed in a written
agreement which is prohibited by this article or other law.
§46A-6E-114. Disclosures -- Telephone solicitations.
(a) All of the disclosures set forth in subsection (b) of
this section shall be made in every telephone communication to a
person to become a lessee in which one of the disclosures set
forth in subsection (b) of this section is disclosed by the
lessor.
(b)(1) Retail value designated as "retail value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, using the words "periodic paymentamount": <fo =127>Provided,
That the term "weekly," "biweekly,"
"semimonthly" or "monthly" as appropriate for the particular
rent-to-own transaction may be substituted for the term
"periodic";
(3) Period called as "period":
Provided,
That this
disclosure does not have to be separately made if the calendar
length of the period is substituted for the term "periodic" in
the disclosure of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, called "number of
payments";
(5) Total of payments, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately disclosed,
called "total of payments";
(6) The term "used" or "previously rented" unless the goods
are new; and
(7) The annual percentage rate calculated using the retail
value, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
§46A-6E-115. Disclosures -- Printed advertisements.
(a) All of the disclosures set forth in subsection (c) of
this section shall be made in every printed advertisement in
which one of the disclosures required in subsection (c) of this
section is disclosed.
(b) All of the disclosures required by this section other
than the periodic payment amount shall have the same appearance
as the disclosure of the periodic payment amount and be at least
two thirds the size of the periodic payment amount.
(c)(1) Retail value designated as "retail value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, using the words "periodic payment
amount":
Provided,
That a dollar sign may be substituted for the
term "amount" and the term "weekly," "biweekly," "semimonthly" or
"monthly" as appropriate for the particular rent-to-own
transaction may be substituted for the term "periodic";
(3) Period designated as "period":
Provided,
That this
disclosure does not have to be separately made if the calendar
length of the period is substituted for the term "periodic" in
the disclosure of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, designated "number of
payments";
(5) Total of payments, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, designated as "total of payments";
(6) The term "used" or "previously rented" unless the goods
are new; and
(7) The annual percentage rate calculated using the retail
value, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
§46A-6E-116. Disclosures -- Radio advertisements.
(a) All of the disclosures set forth in subsection (b) of
this section shall be made in every radio advertisement in which
one of the disclosures set out in subsection (b) of this section
is disclosed. All of the disclosures must be aurally disclosed
at the same loudness and must be otherwise discernable.
(b)(1) Retail value called "retail value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately disclosed in
the same ad, using the words "periodic payment amount":
Provided,
That the term "weekly," "biweekly," "semimonthly" or
"monthly" as appropriate for the particular rent-to-own
transaction may be substituted for the term "periodic";
(3) Period called "period":
Provided,
That this disclosure
does not have to be separately made if the calendar length of the
period is substituted for the term "periodic" in the disclosure
of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, called "number of
payments";
(5) Total of payments, which for the purposes of thissection shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately disclosed,
called "total of payments";
(6) The term "used" or "previously rented" unless the goods
are new;
(7) The annual percentage rate calculated using the retail
value, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
(d) This section shall not apply to a radio advertisement
broadcast over the air from outside this state unless the
advertisement mention a particular premises of the lessor which
is located in West Virginia.
§46A-6E-117. Disclosures -- Television.
(a) All of the disclosures set forth in subsection (d) of
this section shall be made in every television or other video
advertisement in which one of the disclosures set out in
subsection (d) of this section is disclosed.
(b) Unless a variance is granted pursuant to subsection (f)
of this section, if any of the disclosures in subsection (d) of
this section are visually displayed, all of the disclosures must
be visually displayed, and the disclosures other than the
periodic payment must be disclosed for the same period of time,
must be at least two thirds the size of the display of the
periodic payment, and must have the same visual appearance.
(c) Unless a variance is granted pursuant to subsection (f)of this section, if any of the disclosures in subsection (c) of
this section are aural, all of the disclosures must be aurally
disclosed at the same loudness and must be otherwise discernable.
(d)(1) Retail value designated as or called "retail value";
(2) Periodic payment amount, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately and
contiguously disclosed, using the words "periodic payment
amount":
Provided,
That the term "weekly," "biweekly,"
"semimonthly" or "monthly" as appropriate for the particular
rent-to-own transaction may be substituted for the term
"periodic";
(3) Period designated as or called "period":
Provided,
That
this disclosure does not have to be separately made if the
calendar length of the period is substituted for the term
"periodic" in the disclosure of the periodic payment amount;
(4) Number of periodic payments required to be paid by the
lessee to obtain ownership of the goods, designated as or called
"number of payments";
(5) Total of payments, which for the purposes of this
section shall include any sales, use, privilege, excise or
documentary stamp tax unless such tax is separately disclosed,
designated as or called "total of payments";
(6) The term "used" or "previously rented" unless the goods
are new; and
(7) The annual percentage rate calculated using the retailvalue, total of payments, periodic payment, number of payments
and number of periods which would comprise one year, designated
as "annual percentage rate" or "%APR."
(e) This section shall not apply to a television
advertisement which is broadcast over the air from outside this
state unless the advertisement mentions a particular premises of
the lessor which is located in West Virginia.
(f) A lessor may apply to the director of the consumer
protection division of the attorney general's office for a
variance from the requirements of this section requiring all
disclosures to be made visually or aurally if one of the
disclosures is made visually or aurally which shall be granted
if, in the discretion of the director, the lessor's proposed
television advertisement will result in at least the same amount
of disclosure to consumers by mixing aural and visual disclosure
or otherwise.
§46A-6E-118. Prohibition for rent-to-own transactions --
Undisclosed charges or obligations.
No charge to a lessee and no obligation of a lessee may be
requested, required or enforced by a lessor unless it is
disclosed in a written agreement.
§46A-6E-119. Prohibition for rent-to-own transactions --
Downpayment.
The lessee may not be required to pay any down payment or
other initial payment to enter into a rent-to-own transaction or
cause a rent-to-own transaction to be performed unless suchpayment is authorized by this article.
§46A-6E-120. Prohibition for rent-to-own transactions --
Initial period.
The initial period or periods of a rent-to-own transaction
shall not be longer than any subsequent period.
§46A-6E-121. Prohibition for rent-to-own transactions --
Balloon payment; escalated payments.
(a) No payment shall be required to be paid by lessee to
conclude a rent-to-own transaction or to accomplish transfer of
ownership of goods to the lessee other than the amount of any
documentary or other fee charged by a governmental entity to
transfer ownership or proof of ownership if that fee was
disclosed in the written agreement. The charge to the lessee for
the governmental fee or charge may not exceed the actual amount
of the fee charged by a governmental entity or the amount of a
periodic payment, whichever is less, and such payment may not be
required to be paid to the lessor until the end of the next
period following the last period provided by the rent-to-own
transaction.
(b) The amount of the periodic payment, any damage waiver
charge, any pickup charge, and any other payment required to be
paid by a lessee in a rent-to-own transaction which does or may
reoccur during the transaction shall not increase during the
transaction.
§46A-6E-122. Prohibition for rent-to-own transactions --
Charges.
Lessees may not be requested to pay or have enforced against
them any charge in a rent-to-own transaction which is not allowed
by law.
§46A-6E-123. Prohibition for rent-to-own transactions --
Collection.
For the purposes of sections one hundred twenty-two through
one hundred twenty-nine, article two of this chapter a lessee as
defined in section one hundred one of this article is a
"consumer," any obligation or alleged obligation of a lessee in
a rent-to-own transaction is a "claim," and a lessor as defined
in section one hundred one of this article is a "debt collector."
§46A-6E-124. Prohibition for rent-to-own transactions --
Security interests.
A lessor may not take a security interest or any other claim
of a property interest in any goods except those goods which are
the subject of the rent-to-own transaction.
§46A-6E-125. Prohibition for rent-to-own transactions --
Cosignors.
(a) Cosignors to rent-to-own transactions are prohibited.
All parties to a rent-to-own transaction who are not lessors
shall be lessees with all of the statutory and contractual rights
and duties of any other lessee in the same transaction.
(b) Where there is one lessee to a rent-to-own transaction
who occupies the premises where the goods are used there shall
not be an additional lessee to the transaction who does notoccupy the same premises at the time the rent-to-own transaction
is initiated. Where a rent-to-own transaction violates the
provisions of this subsection, the lessor shall not be in
violation of this article if the occupancy of the premises is
misrepresented to the lessor, unless the lessor solicited the
misrepresentation.
§46A-6E-126. Prohibition for rent-to-own transactions --
Certain damage waivers.
A lessor may not require the lessee to have any damage
waiver or any other form of insurance of the value of the goods
or of any payments or obligations of the rent-to-own transaction
in the event of loss or damage to the goods in excess of normal
wear and tear where the retail value of the goods at the time the
rent-to-own transaction is begun is less than six hundred
dollars. A lessor may not require a damage waiver or any other
form of insurance of the value of the goods or of any payments or
obligation of a particular rent-to-own transaction unless the
lessor requires such protection for all goods of that particular
type and value. Where the lessor may require a damage waiver or
other form of insurance, a lessee may not be required to purchase
the damage waiver or any other form of insurance of the value of
the goods or of any payments or obligations of the rent-to-own
transaction in the event of loss or damage to the goods in excess
of normal wear and tear from the lessor.
§46A-6E-127. Limitation on charges -- Total of payments.
The total of payments in a rent-to-own transaction shall notexceed the retail value by more than one hundred thirty-three
percent.
§46A-6E-128. Limitation on charges -- Buy out.
The amount of periodic payments which have not yet become
due which the lessee may be required to pay in order to buy out
a rent-to-own transaction must be twenty percent less than the
retail value divided by the total of payments multiplied by the
amount of the periodic payments which have not yet become due.
§46A-6E-129. Limitation on charges -- Resigning.
The total of payments of a rent-to-own transaction between
the same lessee, or one of the same lessees and the same lessor,
or the lessor's successor, for the same goods as in a previous
rent-to-own transaction shall not be greater than:
(1) The unpaid total of payments for the previous
transaction; plus
(2) Any late charges due as provided by the previous
transaction, allowed by law and unpaid; plus
(3) Any pickup charges due as provided by the previous
transaction, allowed by law and unpaid; plus
(4) Any delivery charge provided by the new written
agreement and allowed by law, but not to exceed any delivery
charge or pickup charge in the previous agreement; plus
(5) The amount of one additional periodic payment.
§46A-6E-130. Limitation on charges -- Late charge.
(a) Any late charge may not exceed one dollar for a weekly
payment and two dollars for a monthly payment.
(b) Only one late charge may be made for any payment for
which a late charge may be charged.
§46A-6E-131. Limitation on charges -- Delivery charge.
A lessee may not be required to pay a delivery charge unless
the goods are delivered by the lessor or the lessor's agent to a
place designated by the lessee which is not on or next to the
premises of the lessor. Any delivery charge may not exceed five
dollars for a delivery of goods within five miles of the premises
at which the rent-to-own transaction with the lessee was made if
no single item to be delivered weighs more than seventy pounds.
Any delivery charge may not exceed ten dollars for a delivery of
goods within five miles of the premises at which the rent-to-own
transaction with the lessee was made if one of the items to be
delivered weighs more than fifty pounds. The charge for any
delivery farther than five miles from the premises of the lessor
shall not exceed the approximate actual cost of the delivery.
§46A-6E-132. Limitation on charges -- Pickup charge.
The pickup charge must be no greater than the reasonable
cost to the dealer of going to the location of the goods and
physically regaining possession of the goods. In no case may a
pickup charge be greater than the delivery charge if one was
provided in the written agreement signed by the lessee at or
prior to the delivery of the goods to the lessee. The pickup
charge may not be greater than that allowed for a delivery charge
by the provisions of this article.
§46A-6E-133. Limitations, etc. -- Door to door solicitations,
telephone solicitations.
(a) In rent-to-own transactions subject to this section the
lessee may not be required to pay a pickup charge.
(b) In rent-to-own transactions subject to this section, if
the lessee terminated the rent-to-own transaction before the
start of the second month of the transaction, any delivery charge
and any other charge other than the periodic payment already made
by the lessee must be refunded to the lessee by the end of the
next payment period.
(c) The limitations of this section apply to all rent-to-own
transactions where:
(1) The particular goods or the particular kind of goods
which are the subject of the rent-to-own transaction in question
were first mentioned in a communication over the telephone which
was initiated by a lessor; or
(2) The lessor took a written agreement for execution off
the premises of the lessor to a consumer or took goods to be the
subject of a rent-to-own transaction off the premises of the
lessor to a consumer unless:
(A) The transaction arose because the lessee initiated a
telephone conversation with the lessor in regard to particular
goods or a particular kind of goods; or
(B) The lessee appeared at the premises of the lessor and
inquired of the lessor regarding particular goods or a particular
kind of goods.
(d) The limitations of this section do not apply where:
(1) The lessor initiates communications with a lessee by
calling and inviting a consumer to come to the lessor's premises
to do business generally if it is disclosed that the consumer
makes no commitment to enter into a rent-to-own transaction by
coming to the premises of the lessor;
(2) The consumer, while at the lessor's premises, authorized
the delivery of the goods to the consumer; or
(3) The consumer initiated a telephone communication with
the lessor and requested particular goods or a particular kind of
goods be taken to the consumer.
§46A-6E-134. Limitation on charges -- Damage waiver insurance.
Where the length of the periodic payment is seven days or
less, the amount which may be charged as a damage waiver or for
any other form of insurance against loss or damage beyond normal
wear or tear or for the performance of any other duty by the
lessee in the rent-to-own transaction shall not exceed fifty
cents for each periodic payment. Where the length of the
periodic payment is longer than seven days, the amount which may
be charged as a damage waiver or for any other form of insurance
against loss or damage beyond normal wear or tear or for the
performance of any other duty by the lessee in the rent-to-own
transaction shall not exceed two dollars for each periodic
payment.
§46A-6E-135. Enforcement.
For a violation of or a failure to comply with the
provisions of this article by a lessor, a lessee is entitled torecover from the lessor the lessee's actual damages, reasonable
attorney's fees and court costs and a civil penalty in an amount
not less than two hundred dollars nor more than two thousand
dollars for each violation.
CHAPTER 61. CRIMES AND THEIR PUNISHMENT.
ARTICLE 3. CRIMES AGAINST PROPERTY.
§61-3-32. Removal out of county of property securing claim;
penalties; fraudulent disposition of personal
property in possession by virtue of lease; notice
to return; failure to return; penalty; right to
immediate possession.
(a) Any debtor under any security instrument conveying
personal property, who retains possession of such personal
property, and who, without the consent of the owner of the claim
secured by such security instrument, and with intent to defraud,
removes or causes to be removed any of the property securing such
claim out of the county where it is situated at the time it
became security for such claim or out of a county to which it was
removed by virtue of a former consent of the owner of the claim
under this section, or, with intent to defraud, secretes or sells
the same, or converts the same to his own use, shall be guilty of
a misdemeanor, and, upon conviction, be fined not more than five
hundred dollars, or imprisoned not more than six months, or both,
in the discretion of the court.
(b) Any person in possession or control of any personal
property by virtue of or subject to a written lease who, withintent to defraud and without written consent of the owner,
disposes of such property by sale or transfer, or secretes or
converts such property to his own use, or removes or causes to be
removed such property from the state shall be deemed guilty of
the larceny of such property:
Provided,
That this subsection
shall not apply to goods which are the subject of rent-to-own
transactions as defined in article six-d of chapter forty-six-a
of this code.
In any prosecution under the provisions of this subsection,
written notice may be mailed by certified mail, addressed to the
lessee at the address of the lessee stated in the lease, and
served on the lessee within ten days of the expiration of the
lease, which notice shall state that the lease has expired and
that lessee has ten days from receipt of such notice to return
the leased property. Proof that the lessee failed to return the
property within ten days of receiving such notice shall in any
prosecution under this subsection constitute prima facie evidence
that the lessee intended to defraud the owner.
Whenever the lessee is a resident of the county in which the
lease was contracted, the lessor, after written notice to the
lessee within ten days after the expiration of the lease, has the
right to immediate possession of the leased property, without
formal process to secure return and possession of the leased
property, if this can be done without breach of the peace. The
lessor is not liable to the lessee for any damages for any action
taken that is reasonable, necessary and incidental to thereclaiming or taking possession of the leased property.
NOTE: The purpose of this bill is to provide consumer
protection in rent-to-own transactions regarding goods to be used
for personal, family or household purposes. It creates the "West
Virginia Consumer Transaction Protection Act" which provides
civil penalties for violations; and it decriminalizes certain
conversions of property or goods acquired in rent-to-own
transactions.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
Article 46A-6E is new; therefore, strike-through and
underscoring have been omitted.