Section 2.  Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:

"Advertisement."  A written, visual or oral communication
made to a lessee or prospective lessee by means of personal
representation, newspaper, magazine, circular, billboard, direct
mailing, sign, radio, television, telephone or other means of
communication that aids, promotes or assists, directly or
indirectly, a rental-purchase agreement.

"Cash price."  The price at which the lessor would offer to sell in the ordinary course of business the same or similar property for cash on the day the lessee enters into a rental-purchase agreement.

"Lessee."  A person who rents personal property pursuant to a
rental-purchase agreement.

"Lessor."  A person who, in the ordinary course of business,
regularly offers to rent or arranges for personal property to be
rented pursuant to a rental-purchase agreement. A lessor is a
creditor as defined in 37 Pa. Code § 303.2 (relating to
definitions), when owed or alleged to be owed a debt and is
subject to 37 Pa. Code Ch. 303 (relating to debt collection
trade practices).

"Personal property."  Any property that is not real property
under the laws of the state where it is located when it is
offered or made available for a rental-purchase agreement.

"Rental-purchase agreement."  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 that is automatically renewable with each rental
payment after the initial period and that permits the lessee to
acquire ownership of the property. It does not include nor is it
subject to laws governing any of the following:

(1)  A lease for agricultural, business or commercial
purposes.

(2)  A lease made to an organization.

(3)  A lease of money or intangible personal property.

(4)  A lease of a motor vehicle, motor home, mobile home or manufactured housing.

(5)  A home solicitation sale under section 7 of the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law.

(6)  A retail installment sale, retail installment
contract or retail installment account as defined in the act of October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as the Goods and Services Installment Sales Act.

(7)  A security interest as defined in 13 Pa.C.S. Ch.
201 (relating to general definitions).

Section 3.  Required disclosures in connection with rental-
purchase agreement.
(a)  General rule.--A lessor shall disclose all of the following in a clear and conspicuous manner:

(1)  A brief description of the rented property
sufficient to identify it to the lessee and lessor and a
statement as to whether the property is new, used or previously rented. If a rental is for multiple items of property, a description of each item may be provided in a separate statement incorporated by reference in the rental- purchase agreement or primary disclosure statement.

(2)  The total amount of any initial payment, including any advance payment, delivery charge or any trade-in allowance, to be paid by the lessee at or before consummation of the rental-purchase agreement.

(3)  The amount and timing of rental payments.

(4)  The amount of all other charges, individually
itemized, payable by the lessee to the lessor that are not included in the rental payments.

(5)  The party who is liable for loss, damage in excess of normal wear and tear or destruction of the rented property.

(6)  The right of the lessee to reinstate under section 6 and the amount of, or method of determining the amount of, the delinquency charges, reinstatement fee or delivery charge for reinstatement.

(7)  The party responsible for maintaining or servicing the rental property and a brief description of the responsibility.

(8)  The conditions upon which the lessee or lessor may terminate the rental agreement prior to the expiration of the rental term.

(9)  The total of all initial payments, all rental
payments and all other charges necessary to acquire ownership of the rented property.

(10)  That the lessee has the option to purchase the
rented property at any time and at what price or by what formula or method the purchase price will be determined.

(11)  The cash price of the personal property that is the subject of the rental-purchase agreement.

(12)  The cost of lease services, which is the difference between the total of payments disclosed under paragraph (9) and the cash price of the property disclosed under paragraph (11).

(13)  That if any part of a manufacturer's warranty
exists on the leased property when a lessee acquires
ownership of the property, the warranty will be transferred to the lessee if permitted by the terms of the warranty.

(14)  That the lessee is not required to purchase
insurance or liability damage waiver for the property that is the subject of the rental agreement from the lessor or from any vendor owned or controlled by the lessor.

(b)  Notice required.--Every primary disclosure statement shall include a notice in a prominent place in at least ten-point type in substantially the following form:

NOTICE

You are renting this property. You will not own it until you make all of the regularly scheduled payments or you use the early purchase option. You do not have the right to keep the property if you do not make required payments or do not use the early purchase option. If you miss a payment, the lessor can repossess the property, but you may have the right to the return of the same or similar property. See the contract for an explanation of your rights.

(c)  Time of disclosure.--Every rental-purchase agreement
shall be in writing. The information required by this section
shall be disclosed by the lessor prior to the signing of the
rental-purchase agreement by the lessee and shall be disclosed
either in the rental-purchase agreement or on a dated, separate
piece of paper that identifies the rental-purchase agreement and
the parties to it.

(d)  Manner of disclosure.--The disclosures required by
subsection (a)(2), (3), (9), (11) and (12) shall be printed or
typed in at least ten-point boldface type and grouped together.
All other disclosures required by this section shall be printed
or typed in at least eight-point type. All numerical amounts and
percentages shall be stated in figures. All information required
by this section shall be written, organized and designed so that
it is easy to read and understand. The information shall be
appropriately divided and captioned by its sections.

(e)  Disclosure of additional information.--A lessor may
disclose information that is not required by this section if the
additional information is not stated, used or placed in a manner
that will contradict, obscure or distract attention from the
required information.

(f)  Compliance with Federal law.--With respect to matters
specifically governed by the Consumer Credit Protection Act
(Public Law 90-321, 15 U.S.C. § 1601 et seq.), compliance with
that act satisfies the requirements of this section.

Section 4.  Prohibited provisions of agreement.
A rental-purchase agreement or any document that the lessor
requests the lessee to sign shall not contain any provision by
which:

(1)  A power of attorney is given to confess judgment in this Commonwealth or to appoint the lessor, its agents or its successors in interest as the lessee's agent in the collection of payments or the repossession of the rental property.

(2)  The lessee authorizes the lessor or its agent to
commit any breach of the peace in repossessing the rental property or to enter the lessee's dwelling or other premises without obtaining the lessee's consent at the time of entry.
(3)  The lessor mandates that the lessee purchase
insurance or liability waiver against loss or damage to the rental property from the lessor. This paragraph shall not, however, be construed to prohibit a lessor from offering insurance or a liability waiver to a lessee provided it is clearly disclosed that acceptance of the offer of insurance or a liability waiver is optional.

(4)  The lessee waives or agrees to waive any defense, counterclaim or right the lessee may have against the lessor, its agent or its successor in interest.

(5)  The lessee is required to pay a fee in connection
with reinstatement except as provided in section 6.

(6)  The lessee is required to pay a fee in connection
with retrieval of the property or the termination or
rescission of the rental-purchase agreement.

(7)  The lessee is charged a fee for in-home collection of a rental payment unless the amount of the fee is disclosed and the lessee expressly has agreed to pay the fee.

Section 5.  Lessee's right to acquire ownership.
(a)  Limitation on payments.--The total of payments in a
rental-purchase transaction shall not exceed 2.2 times the cash
price.

(b)  Payments and cash price.--A lessor shall not offer a
rental-purchase agreement in which 45% of all rental payments
necessary to acquire ownership of the leased property exceeds
the cash price of the leased property. When 45% of all rental
payments made by a lessee equal the cash price of the property,
the lessee shall acquire ownership of the leased property and
the rental-purchase agreement shall terminate.

(c)  Acquisition of ownership.--At any time after tendering
an initial rental payment, a lessee may acquire ownership of the
property that is the subject of the rental-purchase agreement by tendering an amount equal to the amount by which the cash price of the leased property exceeds 45% of all rental payments made by the lessee.

Section 6.  Lessee's right to reinstate agreement after
termination.
(a)  General rule.--A lessee who fails to make a timely
rental payment may reinstate the agreement without losing any
rights or options which exist under the agreement by the payment within five days of the renewal date if the lessee pays monthly, or within two days of the renewal date if the lessee pays more frequently than monthly, of all of the following:

(1)  All past due rental charges.
(2)  The reasonable costs of retrieval and redelivery, if the property has been retrieved.
(3)  Any applicable late fee.

(b)  Reinstatement after return of property.--

(1)  In the case of a lessee who has paid less than two- thirds of the total payments necessary to acquire ownership and where the lessee has returned or voluntarily surrendered the property, other than through judicial process, during the applicable reinstatement period set forth in subsection (a),
the lessee may reinstate the agreement during a period of not less than 30 days after the date of the return of the property.

(2)  In the case of a lessee who has paid two-thirds or more of the total of payments necessary to acquire ownership and where the lessee has returned or voluntarily surrendered the property, other than through judicial process, during the applicable period set forth in subsection (a), the lessee may reinstate the agreement during a period of not less than 90
days after the date of the return of the property.

(c)  Right to reinstate following repossession.--Nothing in this section shall prevent a lessor from attempting to repossess property during the reinstatement period, but a repossession during the reinstatement period shall not affect the lessee's
right to reinstate. Upon reinstatement, the lessor shall provide the lessee with the same property or substitute property of comparable quality and condition.
   

Section 7.  Advertising and display of property.
(a)  Advertisements.--

(1)  An advertisement for a rental-purchase agreement shall not state that a rental of any specific property is available at a specific amount or on specific terms unless the lessor will rent the property at the amount or on the terms specified.

(2)  An advertisement shall not state that a payment or a rental payment is due upon origination of a rental without disclosing all of the following:

(i)  The payment due upon origination of the rental.

(ii)  The rental payment.

(iii)  The total number of rental payments necessary to obtain ownership of the property that is the subject of the rental-purchase agreement.

(b)  Information on displays or offers.--All property
displayed or offered under a rental-purchase agreement shall
have stamped on or affixed to the property and clearly and
conspicuously indicated in Arabic numerals that are readable and
understandable by visual inspection all of the following:

(1)  The amount of the rental payment.

(2)  The cash price of the property.

(3)  The total number and amount of rental payments necessary to acquire ownership of the property that is the subject of the rental-purchase agreement.

(4)  The cost of lease services.

(c)  Compliance with Federal law.--With respect to matters
specifically governed by the Consumer Credit Protection Act
(Public Law 90-321, 15 U.S.C. § 1601 et seq.), compliance with
that act satisfies the requirements of this section.

Section 8.  Lessor's liability for noncompliance.
(a)  Violation of other law.--A violation of this act shall
constitute a violation of the act of December 17, 1968
(P.L.1224, No.387), known as the Unfair Trade Practices and
Consumer Protection Law, and shall be subject to the enforcement provisions and private rights of action contained in that act, except as limited in this section.

(b)  Recovery in class action limited.--Notwithstanding any
other provision of this section or the Unfair Trade Practices
and Consumer Protection Law, in any class action brought for
violation of this act, the total recovery arising out of the
same failure to comply shall not be more than the lesser of
$500,000 or an amount equal to 1% of the net worth of the
lessor.

(c)  Recovery of damages.--If a particular rental-purchase
agreement has more than one lessee, only one recovery of damages is allowed for a violation of this act. Multiple violations in connection with a single rental-purchase agreement entitle the lessee or multiple lessees to only one recovery under this act.

(d)  Commencement of class action.--A class action alleging a
violation of this act may not be brought more than two years
after the occurrence of the violation that is the subject of the
suit or more than two years after the lessee made the last
rental payment, whichever is later. This subsection does not bar
a lessee from asserting a violation of this act as a matter of
defense by recoupment or setoff in an action brought by a lessor
more than two years after the date of the occurrence of the
violation on an obligation arising from the rental-purchase
agreement.

(e)  Counteraction or defense.--A lessee may not take any
action to offset any amount for which a lessor is potentially
liable under the Unfair Trade Practices and Consumer Protection
Law against any amount owed by the lessee unless the amount of the liability of the lessor has been determined by a judgment of a court of competent jurisdiction in an action in which the
lessor was a party. This subsection does not bar a lessee in
default on an obligation arising from the rental-purchase
agreement from asserting a violation of this act in an original
action or as a defense or counterclaim to an action brought by
the lessor to collect amounts owed by the lessee under the
rental-purchase agreement.

Section 9.  Limitations on lessor's liability.
(a)  Right to correct errors.--A lessor is not liable for any
violation of the requirements of this act if within 60 days
after discovering an error and before an action for damages is
filed against the lessor under section 8 or written notice of
the error is received from the lessee, the lessor notifies the
lessee of the error and makes adjustments to the account of the
lessee that are necessary to assure that the lessee is not
required to pay an amount in excess of the amounts permitted by this act. This subsection applies whether the error was
discovered through the lessor's own procedures or by any other
means.

(b)  Limitation in damages.--A lessor is not liable under
subsection (a) for damages in excess of actual damage sustained by the lessee if the lessor shows by a preponderance of the evidence that the violation of this act resulted from a bona fide error, notwithstanding the maintenance by the lessor of procedures reasonably adopted to avoid the error.
(c)  Definition.--As used in this section, the term "bona fide error" includes, but is not limited to, clerical or calculation mistakes, computer hardware or software malfunctions
and programming and printing errors.

Section 10.  Conflict with other law.
In the event of a conflict between this act and the act of
October 28, 1966 (1st Sp.Sess., P.L.55, No.7), known as the
Goods and Services Installment Sales Act, the provisions of this
act shall be controlling.

Section 11.  Effective date.
This act shall take effect January 1, 1997.