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Current Status Bill Number:View additional legislative information at the LPITS web site.3514 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990211 Primary Sponsor:Kirsh All Sponsors:Kirsh, Gamble and Law Drafted Document Number:l:\council\bills\dka\3195mm99.doc Companion Bill Number:435 Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Rental-purchase transactions, consumer cash sales; Banks, Consumer Affairs, Protection Code History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 19990211 Introduced, read first time, 26 HLCI referred to Committee Versions of This Bill
TO AMEND PART 7, CHAPTER 2, TITLE 37, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO A CONSUMER RENTAL-PURCHASE AGREEMENT, BY ADDING SECTION 37-2-715 SO AS TO PROVIDE FOR THE REGISTRATION OF A CONSUMER RENTAL-PURCHASE LESSOR WITH THE DEPARTMENT OF CONSUMER AFFAIRS; BY ADDING SECTION 37-2-716 SO AS TO PROVIDE FOR THE SALE OF INSURANCE IN CONNECTION WITH A CONSUMER RENTAL-PURCHASE TRANSACTION PURSUANT TO SPECIFIED REQUIREMENTS; AND BY ADDING SECTION 37-2-717 SO AS TO PROHIBIT THE IMPOSITION OF UNAUTHORIZED CHARGES IN A CONSUMER RENTAL-PURCHASE TRANSACTION; TO AMEND SECTION 37-2-702, RELATING TO DISCLOSURES IN A CONSUMER RENTAL-PURCHASE TRANSACTION, SO AS TO REQUIRE DISCLOSURE OF A CASH SALES PRICE AND TO MAKE TECHNICAL CHANGES TO DESIGNATIONS OF PROVISIONS; AND TO REPEAL SECTION 37-6-204 RELATING TO CERTAIN NOTIFICATIONS FOR PERSONS ENGAGED IN RENTAL-PURCHASE BUSINESS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Part 7, Chapter 2, Title 37 of the 1976 Code is amended by adding:
"Section 37-2-715. (A) A person may not rent or sell or offer to rent or sell personal property pursuant to a consumer rental-purchase agreement unless that person has applied for and received a certificate of registration from the Department of Consumer Affairs.
(B) An application for certificate of registration must be made on a form approved by the department and must be accompanied by a registration fee of ninety dollars for each business location in which a consumer rental-purchase agreement is offered. A certificate of registration is renewable on July 1 of each year upon the payment of a renewal fee of ninety dollars for each business location. Registration and renewal fees collected pursuant to this section must be used by the department for expenses incurred in examining registrants and in enforcing the provisions of Title 37, the South Carolina Consumer Protection Code.
Section 37-2-716. (A) A lessor in a consumer rental-purchase agreement may contract with the lessee to sell insurance against the loss of or damage to property or against loss resulting from liability if the lessor furnishes a clear and specific statement in writing to the lessee of:
(1) the cost of insurance if obtained through the lessor; and
(2) the lessee's right to choose an insurer other than the lessor.
(B) In addition to the other charges permitted by this chapter, a lessor and a lessee may contract for a liability waiver fee in the following amounts:
(1) In a consumer rental-purchase agreement with weekly or bi-weekly renewal dates, the liability waiver fee may not exceed the greater of:
(a) five percent of a periodic lease payment due; or
(b) two dollars.
(2) In a consumer rental-purchase agreement with monthly renewal dates or renewal dates less frequent than monthly, the liability waiver fee may not exceed the greater of:
(a) five percent of the periodic lease payment due; or
(b) five dollars.
(C) The selling or offering for sale of a liability damage waiver pursuant to this section is subject to the following prohibitions and requirements:
(1) All restrictions, conditions, and exclusions must be:
(a) printed in the consumer rental-purchase agreement, or in a separate agreement, in eight-point type or larger; or
(b) written in ink or typewritten in or on the face of the consumer rental-purchase agreement in a blank space provided for that purpose.
(2) The liability damage waiver may exclude loss or damage to the property caused by moisture, scratches, mysterious disappearance, vandalism, abandonment of the property, or damage intentionally caused by the lessee or resulting from the lessee's wilful or wanton misconduct.
(3) The liability damage waiver agreement must include a statement of the total charge for the waiver. The liability damage waiver agreement must display in eight-point boldface type the following:
'NOTICE: THIS CONTRACT OFFERS, FOR AN ADDITIONAL CHARGE, A LIABILITY DAMAGE WAIVER TO COVER YOUR RESPONSIBILITY FOR DAMAGE TO THE PROPERTY. BEFORE DECIDING WHETHER TO PURCHASE THE LIABILITY DAMAGE WAIVER, YOU MAY WISH TO DETERMINE WHETHER YOUR OWN HOMEOWNERS OR CASUALTY INSURANCE AFFORDS YOU COVERAGE FOR DAMAGE TO RENTAL PROPERTY, AND THE AMOUNT OF THE DEDUCTIBLE UNDER YOUR OWN INSURANCE COVERAGE. THE PURCHASE OF THIS LIABILITY DAMAGE WAIVER IS NOT MANDATORY AND MAY BE DECLINED.'
(4) The rates provided in this section are subject to review and periodic adjustment in accordance with and in the same percentages as other dollar amount adjustments made pursuant to Section 37-1-109. The lessor shall keep or maintain records as prescribed by the department, and the department may inspect the records for accuracy and for fairness and reasonableness of the rates and charges. If the department finds upon inspection that any rates and charges are not fair and reasonable in relation to the consumer benefits provided, rates and charges may be adjusted further through a rulemaking proceeding pursuant to the Administrative Procedures Act.
Section 37-2-717. Except for charges specifically recognized in this part, a person may not offer other services in connection with a consumer rental-purchase agreement or charge or contract to charge other fees or charges in connection with a consumer rental-purchase transaction. Those charges for other benefits of value to the lessor, which charges are reasonable in relation to the benefits, are of a type that is not for credit, and are authorized by the department as a permissible charge, may be imposed. A charge not authorized by this part or by regulation or rule is an illegal excess charge."
SECTION 2. Section 37-2-702 of the 1976 Code is amended to read:
"Section 37-2-702. (1)(A) In a consumer rental-purchase agreement, the lessor shall disclose the following items in writing, as applicable:
(a)(1) the total of scheduled payments.;
(b)(2) the number, amounts, and timing of all payments, including taxes, paid to or through the lessor necessary to acquire ownership of the property.;
(c)(3) a statement that the lessee will does not own the property until the lessee has made the number of payments and the total of scheduled payments necessary to acquire ownership of the property.;
(d)(4) a statement that the total of payments does not include other charges, such as late payment charges, and that the consumer should see must read the contract for an explanation of these charges.;
(e)(5) If applicable, a statement that the lessee is responsible for the fair market value of the property if, and as of the time, it is lost, stolen, damaged, or destroyed.;
(f)(6) a statement indicating whether the property is new or used, provided,. It is not a violation of this section to indicate that the property is used if it is actually new.;
(g)(7) a statement that at any time after the first periodic payment is made, the lessee may acquire ownership of the property by tendering fifty-five percent of the difference between the total of scheduled payments and the total amount paid on the account.;
(h) The administrator of the Department of Consumer Affairs may promulgate regulations setting requirements for the order and conspicuousness of the disclosures set forth in subitems (a) through (h) of this section. These regulations may allow these disclosures to be made in accordance with model forms prepared by the administrator .
(8) a cash price for the property.
(B)(1) 'Cash price' means the price at which retail sellers are selling and retail buyers are buying the same or similar property for cash in the same trade area in which the lessor's place of business is located and a lessor shall maintain records that establish the price disclosed as the cash price. Evidence of the cash price of new rental property may include:
(a) published prices or advertisements by retailers of similar products selling in the same trade area in which the lessor's business is located, if the prices were published or disseminated within the ninety-day period preceding the date of the consumer rental-purchase agreement;
(b) an amount equal to twice the documented actual cost, including freight charges, of the rental property to the lessor from a wholesaler, distributor, or manufacturer;
(c) the manufacturer's suggested retail price.
(2) If a lessor willfully discloses a cash price in a consumer rental-purchase agreement that exceeds the cash price of the property as defined in this subsection, the agreement is void, the consumer may retain the property without any obligation, and the lessor shall refund to the consumer all amounts paid.
(3) A copy of each agreement and the records required by this subsection must be kept for two years after the termination of the agreement. Upon the written request of the Department of Consumer Affairs, a lessor shall provide copies of the records described in this subsection.
(2)(C) In a consumer rental-purchase agreement, the lessor shall make the written disclosures required by subsection (1) of this section clearly and conspicuously before consummation of the transaction, and a copy of the disclosures must be given to the lessee for his records.
(3) In a consumer rental-purchase agreement, the lessor shall make the disclosures in the manner required by subsection (2) of this section before consummation of the transaction.
(D) The Department of Consumer Affairs may promulgate regulations establishing requirements for the order and conspicuousness of the disclosures described in this section. The regulations may allow the disclosures to be made in accordance with model forms prepared by the department."
SECTION 3. Section 37-6-204 of the 1976 Code is repealed.
SECTION 4. This act takes effect upon approval by the Governor.
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