In this Part:
(1) "Advertisement" means a commercial message in any medium
that promotes, directly or indirectly, a consumer
(2) "Consummation" means the time a lessee becomes
contractually obligated on a consumer rental-purchase agreement.
(3) "Lessee" means a natural person who rents personal
property under a consumer rental-purchase agreement.
(4) "Lessor" means a person who regularly provides the use of
property through consumer rental-purchase agreements and to whom
the obligation is initially payable on its face.
(5) "Personal property" means any property that is not real
property under the laws of the state where it is located when it
is made available for a consumer rental-purchase agreement.
(6) "Consumer rental-purchase agreement" means an agreement
for the use of personal property by an individual primarily for
personal, family, or household purposes, for an initial period
of four months or less (whether or not there is any obligation
beyond the initial period) that is automatically renewable with
each payment and that permits the consumer to become the owner
of the property. The term does not include a consumer credit
sale as defined in Section 37-2-104, or a consumer loan as
defined in Section 37-3-104, or a refinancing or consolidation
thereof, or a consumer lease as defined in Section 37-2-106.
37-2-702. Required disclosures; manner of disclosure;
when disclosures required.
(1) In a consumer rental-purchase agreement, the lessor shall
disclose the following items, as applicable:
(a) The total of scheduled payments.
(b) The number, amounts, and timing of all payments including
taxes paid to or through the lessor necessary to acquire
ownership of the property.
(c) A statement that the lessee will 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
(d) A statement that the total of payments does not include
other charges, such as late payment charges, and that the
consumer should see the contract for an explanation of these
(e) 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) 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) 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.
(2) In a consumer rental-purchase agreement, the lessor shall
make the disclosures required by subsection (1) of this section
clearly and conspicuously, and a copy 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.
37-2-703. Renegotiation; extension of agreement.
(a) A renegotiation occurs when an existing consumer
rental-purchase agreement is satisfied and replaced by a new
consumer rental-purchase agreement undertaken by the same lessor
and lessee. A renegotiation is a new lease requiring new
disclosures. However, the following events are not treated as
(1) The addition or return of property in a multiple-item
agreement or the substitution of the leased property, if in
either case the average payment allocable to a payment period is
not changed by more than twenty-five percent.
(2) A deferral or extension of one or more periodic payments,
or portions of a periodic payment.
(3) A reduction in charges in the agreement.
(4) A lease or agreement involved in a court proceeding.
(b) No disclosures are required for any extension of a
consumer rental-purchase agreement.
37-2-704. Advertisements; statement of terms.
(1) If an advertisement for a consumer rental-purchase
agreement refers to or states the amount of any payment or the
right to acquire ownership for a specific item, the
advertisement must also clearly and conspicuously state the
following terms as applicable:
(a) that the transaction advertised is a consumer
(b) the total of payments necessary to acquire ownership.
(c) that the lessee will not own the property until the total
amount necessary to acquire ownership is paid either by payment
of the total of payments over the full term of the agreement or
by prepayment as provided for by law.
(2) Notwithstanding the requirements of subsection (1) of
this section, if the advertisement is published by way of radio
announcement or on a roadside billboard, the lessor need only
make the disclosures required by items (a) and (c) of subsection
37-2-705. Delinquency charges.
(1) With respect to a consumer rental-purchase agreement, the
parties may contract for delinquency charges as follows:
(a) For consumer rental-purchase agreements with payment or
renewal dates which are monthly or less often than monthly, a
delinquency charge not exceeding four dollars may be assessed on
any payment not made within five business days after payment is
due or return of the property is required.
(b) For consumer rental-purchase agreements with payment or
renewal date options to renew more frequently than monthly, a
delinquency charge not exceeding two dollars may be assessed on
any payment not made within three business days after payment is
due or the return of the property is required.
(2) A delinquency charge on a consumer rental-purchase
agreement may be collected only once on any scheduled payment no
matter how long it remains in default. A delinquency charge may
be collected at the time it accrues or at any time thereafter.
No delinquency charge may be assessed against a payment that is
timely made even though an earlier delinquency charge has not
been paid in full.
Deposits; delivery charges; pick up charges.
(1) In a consumer rental-purchase agreement, the lessor may
contract for and receive an initial nonrefundable fee not to
exceed five dollars. Should any security deposit be required by
the lessor, the amount and conditions under which it is returned
must be disclosed with the disclosures required by Section
(2) In a consumer rental-purchase agreement, the lessor may
contract for and receive a delivery charge not to exceed fifteen
dollars or, in the event of a consumer rental-purchase agreement
covering more than five items, a delivery charge not to exceed
forty-five dollars, only if the lessor actually delivers the
item to the lessee's dwelling and the delivery charge is
disclosed with the disclosures required by Section 37-2-702. The
delivery charge may be assessed in lieu of and not in addition
to the initial charge in subsection (1) of this section.
(3) In a consumer rental-purchase agreement, a lessor may
contract for and receive a charge for picking up payments from
the lessee if the lessor is required or requested to visit the
lessee's dwelling to pick up a payment. In a consumer rental
purchase agreement with payment or renewal dates which are
monthly or less frequent than monthly, this charge may not be
assessed more than three times in any six-month period. In
consumer rental-purchase agreements with payments or renewal
options more frequently than monthly, this charge may not be
assessed more than six times in any six-month period. No charge
assessed pursuant to this subsection may exceed seven dollars.
This charge is in lieu of any delinquency charge assessed for
the applicable payment period.
SECTION 37-2-707. Charge for default of lessee.
Except as specifically provided for in this part, a consumer
rental-purchase agreement may not provide for any charges as a
result of the default of the lessee. A provision in violation of
this section is unenforceable.
SECTION 37-2-708. Use of note as evidence of consumer's
With respect to a consumer rental-purchase agreement, the lessor
may not take a negotiable instrument other than a check dated
not later than ten days after its issuance as evidence of the
obligation of the consumer.
Assignment; claims or defenses.
(1) With respect to a consumer rental-purchase agreement, an
assignee of the rights of the lessor is subject to all claims
and defenses of the consumer against the lessor arising from the
lease of property or services, notwithstanding that the assignee
is the holder in due course of a negotiable instrument issued in
violation of the provisions prohibiting certain negotiable
instruments (Section 37-2-708).
(2) A claim or defense of a consumer specified in subsection
(1) may be asserted against the assignee under this section only
if the consumer has made a good faith attempt to obtain
satisfaction from the lessor with respect to the claim or
defense and then only to the extent of the amount owing the
assignee with respect to the sale or lease of the property or
services as to which the claim or defense arose at the time the
assignee has written notice of the claim or defense. Written
notice of the claim or defense may be given before the attempt
specified in this subsection. For the purposes of this section,
written notice is any written notification other than notice on
a coupon, billing statement, or other payment medium or
materials supplied by the assignee.
(3) An agreement may not limit or waive the claims or
defenses of a lessee under this section.
SECTION 37-2-710. Assignment of earnings.
A lessor may not take an assignment of earnings of the buyer
or lessee for payment or as security for payment of a debt
arising out of a consumer rental-purchase agreement. An
assignment of earnings in violation of this section is
unenforceable by the assignee of the earnings and revocable by
the buyer or lessee. This section does not prohibit an employee
from authorizing deductions from his earnings if the
authorization is revocable.
37-2-711. Lessee's rights and obligations upon
The lessee is authorized to pay the original lessor until the
lessee receives written notification of assignment of the rights
to payment pursuant to a consumer rental-purchase agreement and
that payment is to be made to the assignee. A notification which
does not reasonably identify the rights assigned is ineffective.
If requested by the lessee, the assignee must seasonably furnish
reasonable proof that the assignment has been made and unless he
does so the lessee may pay the lessor.
37-2-712. Confession of judgment.
A lessee may not authorize any person to confess judgment on
a claim arising out of a consumer rental-purchase agreement. An
authorization in violation of this section is void.
SECTION 37-2-713. Lessee's right to return property,
continue rental, or purchase property before end of
In a consumer rental-purchase agreement, at any time after
the lessee has made the first periodic payment, the lessee may:
(1) return the rented property to the lessor,
(2) continue making periodic payments or renewals as provided
for in the agreement for the remaining term of the agreement, or
(3) purchase the property by tendering fifty-five percent of
the difference between the total of scheduled payments and the
total amount paid on the account.
SECTION 37-2-714. Lessee's right to reinstatement of
(1) A lessee who fails to make timely periodic payment or
payments has the right to reinstate the original consumer
rental-purchase agreement without losing any rights or options
previously acquired under the consumer rental-purchase agreement
if both of the following apply:
(a) The consumer rental-purchase agreement is not more than
sixty days in default.
(b) One periodic payment has been missed and the lessee has
surrendered the item to the lessor, if requested by the lessor,
during the time in which payments were missed.
(2) As a condition precedent to reinstatement of the consumer
rental-purchase agreement, a lessor may charge the outstanding
balance of any accrued payments and delinquency charges plus
delivery charges allowable by Section 37-2-706(2) if redelivery
of the item is necessary.
(3) If reinstatement occurs pursuant to this section, the
lessor shall provide the lessee with either the same item leased
by the lessee prior to reinstatement or a substitute item of
comparable quality and condition. If a substitute item is
provided the lessor shall provide the lessee with all the
information required by Section 37-2-702.
SECTION 37-1-109. Change of
dollar amounts used in the Consumer Protection Code.
(1) From time to time the dollar amounts in this title shall
change, as provided in this section, according to and to the
extent of changes in the Consumer Price Index for Urban Wage
Earners and Clerical Workers: U. S. City Average, All Items,
1967=100, compiled by the Bureau of Labor Statistics, United
States Department of Labor, and hereafter referred to as the
Index. The Index for December of 1976 is the Reference Base
(2) The designated dollar amounts shall change on July first
of each even-numbered year if the percentage of change,
calculated to the nearest whole percentage point, between the
Index at the end of the preceding year and the Reference Base
Index is ten percent or more, but
(a) the portion of the percentage change in the Index in
excess of a multiple of ten percent shall be disregarded and the
dollar amounts shall change only in multiples of ten percent of
the amounts appearing in this title; and
(b) the dollar amounts shall not change if the amounts
required by this section are those currently in effect as a
result of earlier application of this section.
(3) If the Index is revised, the percentage of change
pursuant to this section shall be calculated on the basis of the
revised Index. If a revision of the Index changes the Reference
Base Index, a revised Reference Base Index shall be determined
by multiplying the Reference Base Index then applicable by the
rebasing factor furnished by the Bureau of Labor Statistics. If
the Index is superseded, the Index referred to in this section
is the one represented by the Bureau of Labor Statistics as
reflecting most accurately changes in the purchasing power of
the dollar for consumers.
(4) The Administrator, as defined in Section 37-1-301, shall
publish a notice in the State Register:
(a) On or before April thirtieth of each year in which dollar
amounts are to change, the changes in dollar amounts required by
subsection (2); and
(b) Promptly after the changes occur, changes in the index
required by subsection (3) including, if applicable, the
numerical equivalent of the Reference Base Index under a revised
Reference Base Index and the designation or title of any index
superseding the index.
(5) A person shall not be deemed to have violated this title
with respect to a transaction otherwise complying with this
title if he relies on dollar amounts either determined according
to subsection (2) or appearing in the last regulation of the
Administrator announcing the then current dollar amounts.
(6) The dollar amounts in the following sections of this
title are subject to change in accordance with this section:
37-2-104(1)(e), 37-2-106(1)(b), 37-2-203(1), 37-2-407(1),
37-2-705 (1)(a) and (b), 37-3-104(1)(d), 37-3-203(1), 37-3-510,
37-3-511, 37-3-514, 37-5-103(2), (3), and (4).