PRIOR PRINTER'S NOS. 175, 1732 PRINTER'S NO. 1978
No. 170 Session of 1975
INTRODUCED BY MESSRS. SCHMITT, ZEARFOSS, MANDERINO, RENNINGER,
MRS. GILLETTE, MESSRS. A. K. HUTCHINSON, BRUNNER, MRS. TOLL,
MESSRS. SHANE, VANN, TAYLOR, ROMANELLI, LAUGHLIN, COHEN,
TRELLO, ROSS, ABRAHAM, DeMEDIO, RAPPAPORT, SCHWEDER, IRVIS,
WOJDAK, DOMBROWSKI, GREENFIELD, MORRIS, BERLIN, PIEVSKY,
MUSTO, SHUPNIK, GREEN, PERRY, REED, STAPLETON, FEE, MENHORN,
KOWALYSHYN, ZORD, WARGO, RUGGIERO, WALSH, O'DONNELL,
McLANE AND MRKONIC, JANUARY 28, 1975
AS RE-REPORTED FROM COMMITTEE ON CONSUMER PROTECTION, HOUSE OF
REPRESENTATIVES, AS AMENDED, JULY 14, 1975
AN ACT
1 Relating to consumer transactions, including credit sales,
2 consumer leases, related direct consumer loans, and advances
3 made to credit card users, regulating contract provisions,
4 the termination of consumer defenses, the disclaimer of
5 warranties, and the entry of judgments by confession,
6 providing additional exemptions from execution in actions on
7 consumer transactions, prohibiting waivers of exemptions,
8 imposing duties on the Attorney General and on
9 prothonotaries, and repealing inconsistent provisions of the
10 Goods and Services Installment Sales Act, the Home
11 Improvement Finance Act, the Motor Vehicle Sales Finance Act
12 and other inconsistent laws.
13 The General Assembly of the Commonwealth of Pennsylvania
14 hereby enacts as follows:
15 Section 1. Short Title.--This act shall be known and may be
16 cited as the "Consumer Transactions Act."
17 Section 2. Definitions.--The following words and phrases
18 when used in this act shall have, unless the context clearly
19 indicates otherwise, the meanings given to them in this section:
1 "Consumer." An individual buying, borrowing, or leasing <--
2 goods or services acquired primarily for personal, family or
3 household use.
4 "Consumer goods." Goods used, leased or bought for use
5 primarily for personal, family or household purposes, whether
6 acquired in THROUGH A cash or a credit transaction. <--
7 "Consumer services." Work, labor or services furnished
8 primarily for personal, family or household purposes. and THE <--
9 TERM includes services furnished in connection with the sale or
10 repair of goods, the repair or servicing of motor vehicles, or
11 the installation or application of goods in the modernization,
12 rehabilitation, repair, alteration, improvement or
13 reconstruction of RESIDENTIAL real property, whether the goods <--
14 become RESIDENTIAL fixtures or become real property AND WHETHER <--
15 ACQUIRED THROUGH A CASH OR CREDIT TRANSACTION BUT NOT INCLUDING
16 SERVICES FOR WHICH THE TARIFFS ARE REGULATED BY THE PENNSYLVANIA
17 PUBLIC UTILITY COMMISSION.
18 "Default." Notwithstanding any other definition in the
19 contract or agreement of the parties, only DEFAULT MEANS ONLY <--
20 ONE OR MORE OF THE FOLLOWING: the nonpayment of one or more <--
21 installments; an unauthorized voluntary or involuntary
22 disposition of the collateral increasing the secured party's
23 risk of nonpayment; a failure to repair significant damage to
24 the collateral; a failure to procure or maintain in effect any
25 insurance required under the terms of the contract or agreement;
26 or the commission of any other act specified in the agreement
27 which reasonably impairs the prospect of payment or performance.
28 "Household." Includes all persons who may reasonably be <--
29 expected to use, consume, or be affected by the consumer goods
30 or services in question.
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1 "Supplying consumer goods or services." Selling, leasing,
2 assigning or awarding by chance or by any other means, consumer
3 goods or services and includes any solicitation by a supplier
4 with respect to any of these means of supplying consumer goods
5 or services.
6 Section 3. Limitation on Warranty Disclaimers and Limitation
7 of Damages for Breach in Supplying or Manufacturing Goods
8 Becoming Consumer Goods.--(a) No person supplying or
9 manufacturing consumer goods shall limit or disclaim any implied
10 warranties of merchantability or of fitness for a particular
11 purpose, or limit damages for personal injuries arising out of a
12 breach of warranty. The use of any contract provision purporting
13 to do so shall constitute a violation of this act.
14 (b) Any limitation of damages for breach of any warranty
15 express or implied to the repair or replacement and installation
16 of defective parts or merchandise shall not be effective unless
17 the person supplying the consumer goods or the manufacturer
18 making the warranty maintains places of business within this
19 State or within 100 miles of the point of sale, whichever is
20 closer to the point of sale, through which warranty service is
21 effected within a reasonable period of time after request
22 therefor by the consumer. In any event such limitation shall not
23 be effective after the second attempt by the seller or
24 manufacturer to cure the same defect; and after such second
25 attempt fails, the consumer shall be entitled to resort to all
26 remedies provided by law, including the right to revoke
27 acceptance and recover all payments theretofor made, less the
28 reasonable value to the consumer of the actual use made of the
29 consumer goods. The consumer's recovery shall include
30 reimbursement of any extra expenses actually incurred for
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1 substitute goods or services while the consumer goods were held
2 for repair, if such holding was for more than 10 days at any one
3 time.
4 (c) Subsections (a) and (b) of this section shall not be
5 construed to abrogate the right to supply previously used
6 consumer goods on an "as is" or "with all faults" basis,
7 provided, however, that the contract of sale or other document
8 evidencing the transaction shall contain the following notice,
9 printed prominently and in the form below in twelve (12) point
10 extra bold type, or larger, directly above or beside the space
11 provided for the buyer's signature or the bottom of the
12 document:
13 NOTICE TO BUYER
14 THE GOOD YOU ARE BUYING ARE SOLD TO YOU "AS IS"
15 OR "WITH ALL FAULTS." THIS MEANS THAT NO WARRANTY
16 OR GUARANTEE IS GIVEN AND THAT YOU MUST BEAR THE
17 FULL RISK THAT THESE GOODS MIGHT BE DEFECTIVE.
18 EXERCISE CAUTION BEFORE BUYING!
19 (d) No disclaimer of warrranties or limitation of remedies
20 or of damages for breach of warranty, including the use of such
21 words as "as is" or "with all faults," shall be effective as
22 against the person supplying or manufacturing the goods unless
23 the contract or agreement discloses, in a conspicuous place on
24 the warranty, in a manner comprehensible to the average consumer
25 served by such person the extent to which his legal rights
26 otherwise inherent in the contract are impaired by his execution
27 of the agreement or contract.
28 "SELLER." MEANS ANY PERSON WHO IN THE COURSE OF HIS BUSINESS <--
29 SELLS, LEASES, ASSIGNS, OR BY ANY OTHER MEANS, CONVEYS CONSUMER
30 GOODS OR SERVICES.
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1 "SUPPLYING CONSUMER GOODS OR SERVICES." SELLING, LEASING OR
2 ASSIGNING CONSUMER GOODS OR SERVICES IN THE COURSE OF BUSINESS.
3 SECTION 3. DISCLAIMERS OF IMPLIED WARRANTIES.--PREVIOUSLY
4 USED, SHOPWORN OR DAMAGED CONSUMER GOODS MAY BE SUPPLIED TO ON
5 AN "AS IS" OR "WITH ALL FAULTS" BASIS: PROVIDED, THAT THE
6 CONTRACT OF SALE, SALES RECEIPT, OR OTHER DOCUMENT EVIDENCING
7 THE TRANSACTION SHALL CONTAIN ON ITS FACE THE FOLLOWING NOTICE,
8 IN 12 POINT OR LARGER BOLD TYPE, PRINTED DIRECTLY ABOVE OR
9 BESIDE THE SPACE PROVIDED FOR THE BUYER'S SIGNATURE OR ON THE
10 BOTTOM OF THE DOCUMENT:
11 NOTICE TO BUYER
12 THE GOODS YOU ARE BUYING ARE SOLD TO YOU "AS IS" OR "WITH ALL
13 FAULTS." THIS MEANS THAT NO WARRANTY OR GUARANTEE IS GIVEN
14 AND THAT YOU MUST BEAR THE FULL RISK THAT THESE GOODS MIGHT
15 BE DEFECTIVE.
16 EXERCISE CAUTION BEFORE BUYING!
17 Section 4. Prohibited Contract Terms.--(a) No person
18 supplying consumer goods or services shall use any form of
19 contract or agreement containing any clause or term NOR SHALL <--
20 ANY SUCH CLAUSE OR TERM BE EFFECTIVE whereby:
21 (1) The consumer agrees not to assert against the person
22 supplying the goods or services or any assignee or transferee of
23 the consumer's contract or agreement any claim or defense
24 arising out of the consumer transaction.
25 (2) The person supplying the goods or services, any
26 assignee, or any person acting on behalf of either is given
27 authority to enter upon the consumer's premises or commit a <--
28 breach of the peace in the enforcement of the terms of the
29 agreement or contract. but this subdivision shall not prohibit <--
30 peaceable entry upon the premises with the consent of the
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1 consumer given after default.
2 (3) The consumer waives any right of action against the
3 person supplying the goods or services, any assignee, or any
4 person acting on behalf of either, for any violation of this act
5 or any breach of the peace or other wrongful act committed in
6 the enforcement of the contract or agreement; but this provision
7 shall not prohibit a release of any accrued cause of action as a
8 part of a bona fide settlement of a dispute.
9 (4) The person supplying the goods or services, any assignee <--
10 or any person acting on behalf of either is given the right to
11 commence an action or other legal proceeding or require
12 arbitration of disputes in any foreign state or country or in
13 any county of this State other than the county in which the
14 buyer resides at the commencement of the action, or, if the
15 buyer no longer resides in this State, in the county in which he
16 resided at the time the contract or agreement was entered into,
17 or, if the goods are affixed to or so affiliated with real
18 property as to become fixtures, in the county in which the real
19 property is located.
20 (5) (4) Any provision with respect to repayments or security <--
21 prohibited by section 12 11 of this act. <--
22 (b) It shall be a violation of this act for any person <--
23 supplying consumer goods or services to use a form of contract
24 containing any clause, provision or term prohibited by this act,
25 and a separate and additional violation to refer to or utilize
26 any such clause, term or provision in any attempt to effect
27 collection from a consumer or a settlement with a consumer.
28 (B) IT SHALL BE A VIOLATION OF THIS ACT FOR ANY PERSON <--
29 SUPPLYING CONSUMER GOODS OR SERVICES TO REFER TO OR UTILIZE ANY
30 CLAUSE, PROVISION OR TERM PROHIBITED BY THIS ACT IN ANY ATTEMPT
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1 TO EFFECT COLLECTION FROM A CONSUMER OR A SETTLEMENT WITH A
2 CONSUMER.
3 Section 5. Control of Acceleration Clauses.--(a) No person
4 supplying consumer goods and services shall use any contract,
5 agreement, note or other instrument in a consumer credit
6 transaction which provides for acceleration of the entire unpaid
7 indebtedness or any portion thereof in advance of the stated due
8 date unless the provision for acceleration is expressed to be
9 operative only if: NOR SHALL SUCH ACCELERATION BE EFFECTIVE <--
10 UNLESS:
11 (1) the person supplying the goods or services, or an
12 assignee, shall have first given the consumer 14 days prior
13 notice of the intent to accelerate, of the grounds on which the
14 acceleration is based, and of the consequence of default in a
15 conspicuous place and in the following form on the notice and <--
16 served by such person; and: <--
17 IMPORTANT NOTICE REQUIRED BY LAW
18 NOTICE OF INTENTION
19 TO ACCELERATE
20 THE MATURITY OF OBLIGATION,
21 COMMENCE LEGAL ACTION AND/OR REPOSSESS
22 YOU HAVE DEFAULTED ON YOUR OBLIGATION, DESCRIBED AS FOLLOWS: <--
23 Transaction No.
24 Date of Contract
25 Contract Secured by the following goods you purchased
26 (Specify)
27 Contract Secured by the following collateral
28 YOU HAVE DEFAULTED ON YOUR OBLIGATION, DESCRIBED
29 AS FOLLOWS:
30 TRANSACTION NO. <--
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1 DATE OF CONTRACT
2 CONTRACT SECURED BY THE FOLLOWING GOODS YOU PURCHASED
3 (SPECIFY)
4 CONTRACT SECURED BY THE FOLLOWING COLLATERAL
5 (SPECIFY)
6 A. _____You have violated the following terms of your contract:
7 (Description, using original contract language)
8 B. _____You have failed to make installment payments on:
9 (Dates)
10 A statement of your account is as follows:
11 1. Initial amount - $ _____
12 2. Present amount owing (initial amount minus
13 payments you have made) - $ _____
14 3. Late payments in the total amount of $_____ due as
15 of (date) - $ _____
16 4. Current payment due as of (date) - $ _____
17 5. Late charges $ _____
18 6. OTHER COSTS (SPECIFY) - $____ <--
19 6. 7. Actual cost of service of this notice - $ _____ <--
20 7. 8. TOTAL AMOUNT OF PAYMENTS DUE (total of 3, 4, 5, <--
21 and 6) 6 AND 7) - $ _____ <--
22 YOU HAVE THE RIGHT TO BRING YOUR ACCOUNT UP TO DATE. IN ORDER <--
23 YOU HAVE THE RIGHT TO BRING YOUR ACCOUNT UP TO DATE. IN <--
24 ORDER TO DO SO, YOU MUST DO THE FOLLOWING NOT LATER THAN (date),
25 WHICH IS NOT LESS THAN 14 DAYS FROM THE DATE YOU RECEIVE THIS
26 NOTICE:
27 C. A. _____(Specify required performance, as described above) <--
28 D. B. _____(PAY THIS AMOUNT: total amounts of payments <--
29 due under "7" "8", above) <--
30 If you do as required under "C" and "D" "A" AND "B" above, <--
19750H0170B1978 - 8 -
1 you may continue to keep your contract in effect without any
2 additional penalties or costs being imposed.
3 SHOULD YOU FAIL TO DO SO BY THE SPECIFIED DATE, THE ENTIRE
4 PRESENT AMOUNT OWING YOUR CONTRACT WILL BECOME IMMEDIATELY DUE;
5 ANY GOODS BY WHICH THE CONTRACT IS SECURED AND/OR ANY COLLATERAL
6 GIVEN UNDER THAT CONTRACT MAY BE IMMEDIATELY, PEACEFULLY
7 REPOSSESSED AND LEGAL ACTION MAY BE BEGUN BEFORE OR AFTER
8 REPOSSESSION.
9 Any overdue installments may be paid at the following:
10 ____________________________
11 (address) (phone) Payment
12 must be made only by (specify: personal check, money order,
13 other). ; AND <--
14 (2) the consumer shall be in default; and either <--
15 (3) the consumer has not, within the 14-day period of the
16 notice, cured the default or given the person sending the notice <--
17 adequate assurances of payment or performance; or ; OR <--
18 (4) the default is the third default of the consumer during
19 the term of the contract.
20 (b) Upon the cure of any default the acceleration shall
21 terminate and the contract shall be reinstated in accordance
22 with its original terms. Cure shall consist of the elimination
23 of the grounds for default, including the payment of all unpaid
24 installments falling due without acceleration in accordance with
25 the contract before and during the period of the default, and <--
26 the payment of any legal late charges, COST OF SUIT AND <--
27 REASONABLE ATTORNEY'S FEES.
28 (c) Notices of acceleration in the form as set forth above
29 shall be mailed, certified mail return receipt requested in time <--
30 , AND to be received by the consumer, in current course of mail, <--
19750H0170B1978 - 9 -
1 or delivered, not less than 14 days before the date at which the
2 indebtedness will become due by acceleration. Mailing in <--
3 accordance with reasonable estimates of time required for
4 delivery shall constitute compliance with this section, but if
5 IF a return receipt shows a delivery at a date less than 14 days <--
6 from the date fixed for acceleration the consumer may effect
7 cure within 14 days of the date of the receipt shown.
8 Section 6. Entry of Judgments by Confession.--(a) A consumer <--
9 credit contract may provide for the entry of a judgment by
10 confession on warrant of attorney. But every such warrant shall
11 specify that the judgment is confessed pursuant to and is
12 subject to the provisions of this act. The prothonotary of the
13 court in which the judgment is entered shall note the fact that
14 the judgment is subject to the provisions of this act in the
15 judgment roll and in the docket of judgments. If the judgment so
16 confessed is not confessed subject to the limitation that the
17 lien of the judgment shall not bind any real estate which is
18 used as a principal residence of the consumer, the person
19 entering the judgment shall furnish the prothonotary of the
20 court in which the judgment is to be entered with evidence,
21 satisfactory to such prothonotary, that the entry of the
22 judgment is in compliance with sections 121, 122 and 125 of
23 Title I of the Federal Consumer Credit Protection Act, (82 Stat.
24 152, et seq.), as amended, and of the relevant provisions of
25 this act. In the absence of such limitation or of such evidence
26 the prothonotary shall not enter the judgment.
27 SECTION 6. ENTRY OF JUDGMENTS BY CONFESSION.--(A) <--
28 NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, AN AGREEMENT
29 EVIDENCING A CONSUMER TRANSACTION MAY PROVIDE FOR THE ENTRY OF
30 JUDGMENT BY CONFESSION ON WARRANT OF ATTORNEY. EVERY SUCH
19750H0170B1978 - 10 -
1 WARRANT SHALL SPECIFY THAT THE JUDGMENT IS CONFESSED PURSUANT TO
2 AND SUBJECT TO THE PROVISIONS OF THIS ACT. THE PROTHONOTARY OF
3 ANY COURT IN WHICH SUCH JUDGMENT IS ENTERED SHALL SO NOTE IN THE
4 APPROPRIATE DOCKET. SUCH JUDGMENT MAY BE CONFESSED, ACCORDING TO
5 THE TERMS OF THE AGREEMENT, AT ANY TIME AND FOR ANY AMOUNT
6 SPECIFIED IN THE AGREEMENT. ANY JUDGMENT WHICH FAILS TO COMPLY
7 WITH THE PROVISIONS OF THIS SECTION SHALL BE INEFFECTIVE.
8 (b) No such judgment shall serve as the basis for a levy or
9 execution until the plaintiff files a complaint averring an
10 uncured default and proceeds as in original proceedings in
11 assumpsit. In the proceedings the judgment shall be amended as
12 may be appropriate by the judgment or order entered in the
13 proceedings on the complaint, but the lien of the judgment shall
14 date from the date of the entry of the judgment by confession.
15 (c) No such judgment shall be entered in any court of this <--
16 Commonwealth, or elsewhere, if the amount unpaid in the consumer
17 credit transaction shall be, at the time of entry, less than
18 $1,000.
19 (d) The fee for entering a judgment by confession under this
20 act shall include the fee for entering a satisfaction thereof.
21 No part of all such fees shall be charged to or paid by the
22 consumer.
23 (e) (C) A failure by a judgment creditor who has received <--
24 satisfaction OF THE DEBT IN FULL to notify the prothonotary <--
25 thereof, within ten days of receipt of satisfaction OF THE DEBT <--
26 IN FULL shall constitute a violation of this act.
27 (f) For the purposes of this section satisfaction of a <--
28 consumer debt shall include the reduction of the amount unpaid
29 in the consumer transaction to a sum less than $1,000.
30 Section 7. Limitation on Negotiable Instruments.--(a) No
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1 person supplying consumer goods or services shall take as
2 evidence of or security for the performance of any obligation of
3 the consumer any negotiable instrument (AS DEFINED IN ARTICLE 3 <--
4 OF THE UNIFORM COMMERCIAL CODE) other than a check or bank draft
5 for current collection taken in conditional payment of an
6 obligation presently due.
7 (b) Any person supplying consumer goods and services and
8 taking a written instrument for the payment of deferred consumer
9 obligations shall conspicuously mark the instrument "Consumer
10 Obligation - Not Negotiable" in conspicuous type on its face.
11 Section 8. Rights of Assignees of Consumer Contracts or
12 Agreements.--(a) An assignee of a person supplying consumer
13 goods and services or a transferee of a consumer's monetary
14 obligation incurred in a consumer transaction shall not be
15 liable to the consumer in respect of any claim or defense
16 against the person supplying the consumer goods or services
17 beyond the amount originally paid by such assignee or transferee
18 for the obligation assigned or transferred.
19 (b) This section shall not limit the right of a consumer to
20 withhold payments due in respect of a consumer transaction
21 pending settlement of a disputed claim of which notice has been
22 given.
23 Section 9. Transferees Subject to Consumer Claims and
24 Defenses.--(a) A transferee of a consumer obligation arising out
25 of a consumer transaction shall be subject to all claims or
26 defenses of the consumer which are good against the person
27 supplying the consumer goods and services except that:
28 (1) a transferee shall not be subject to claims or defenses
29 arising out of other transactions between the parties which
30 shall accrue after the consumer has been notified of the
19750H0170B1978 - 12 -
1 transfer; or
2 (2) a transferee of a check or bank draft taken for current
3 collection IN PAYMENT OF A DEBT ALREADY DUE by a person <--
4 supplying consumer goods or services may become a holder in due
5 course of the check or bank draft, but there can be no holder in
6 due course of any other instrument taken in a consumer
7 transaction.
8 (b) The liability under this section exists whether the
9 transferred obligation is evidenced by a negotiable instrument,
10 whether the contract or agreement contains a clause waiving
11 defenses against an assignee, whether the person supplying goods
12 and services has marked any negotiable instrument as required by
13 section 7 (b) of this act and whether the transferee is an
14 immediate or remote transferee of the person supplying consumer
15 goods and services.
16 (c) Notwithstanding anything contained in this act, neither
17 a depository nor a collecting nor a payor bank shall be or
18 become liable to a consumer's defenses or claims against a
19 person supplying consumer goods or service by reason of the
20 handling in course of current collection for a customer of any
21 item made, drawn or accepted by a consumer. <--
22 Section 10. Related Lenders and Credit Card Issues ISSUERS <--
23 Subject to Consumer Claims and Defenses.--(a) With respect to a
24 consumer loan, other than a loan primarily for agricultural
25 purposes, a lender who is a related lender with respect to a
26 person supplying consumer goods or services, shall be subject to
27 all claims and defenses of the borrower arising out of the
28 consumer transaction for which the loan was made, which would be
29 assertable in an action between the borrower and the person
30 supplying the goods and services but the lender's liability in
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1 the aggregate for any one consumer transaction shall not exceed
2 the amount originally loaned to the borrower in respect of that
3 transaction.
4 (b) The term "related lender" refers to a lender whose
5 participation in a consumer transaction is arranged by the
6 seller of the consumer goods purchased. Knowledge alone on the
7 part of the lender that the proceeds of the loan shall be used
8 to purchase consumer goods shall not cause the lender to be a
9 "related lender." Without limiting the scope of inquiry
10 concerning arrangement by the seller, the seller will be deemed
11 to have arranged the loan, and the lender may be presumed to be
12 a "related lender" when one or more of the following
13 circumstances exist:
14 (1) the lender or a principal officer, principal
15 shareholder, partner, owner, or principal supplier of capital is
16 so connected with or related by blood or through marriage to the
17 person supplying the consumer goods or services or one of such
18 person's principal officers, principal shareholders, partners,
19 owners or principal supplier of capital other than that supplied
20 by the lender, that dealings between the lender and the person
21 supplying the consumer goods and services would not be at arm's
22 length; or
23 (2) the lender has furnished the seller with forms for loan <--
24 applications and the form was furnished to the consumer by or on
25 behalf of the person furnishing the consumer goods and services;
26 or
27 (2) THE SELLER HAS ARRANGED FOR THE EXTENSION OF CREDIT TO <--
28 THE BORROWER BY THE LENDER BY PROVIDING (TO THE LENDER) EITHER
29 CREDIT APPLICATION SUBSTANTIALLY COMPLETED BY THE CONSUMER, OR
30 SUCH INFORMATION ACQUIRED FROM THE CONSUMER AS TO ENABLE THE
19750H0170B1978 - 14 -
1 LENDER TO COMPLETE SUBSTANTIALLY SUCH AN APPLICATION; OR
2 (3) the person supplying the consumer goods or services
3 receives a fee or other thing of value from the lender in
4 respect of the loan or otherwise has a participation, <--
5 PARTICIPATED, directly or indirectly, with the lender in the <--
6 finance charge on the loan, or has agreed to purchase from the
7 lender, upon default, any collateral held for the loan; or
8 (4) the lender directly or indirectly controls, or is
9 directly or indirectly controlled by, or is under direct or
10 indirect common control with the person supplying the consumer
11 goods or services; or
12 (5) the person supplying the consumer goods or services has <--
13 referred the consumer, or three or more other borrowers to the
14 lender for loans to acquire consumer goods or services from the
15 person; or
16 (6) (5) the lender and the person supplying the consumer
17 goods and services are engaged in a joint venture to produce
18 consumer obligations payable to the lender; or
19 (7) (6) the lender has recourse to the seller for nonpayment <--
20 of the loan through guaranty, reserve account or otherwise.
21 (c) An issuer of a third party credit card shall be a
22 related lender if the consumer goods or services are acquired by
23 the use of its credit card and the goods or services acquired:
24 (1) have a cash price of more than $40 $50; and <--
25 (2) do not consist of meals, lodging, drink consumed on <--
26 premises, or tickets for travel, sports or other entertainment;
27 and
28 (3) were acquired in the state of the consumer's residence,
29 or, if in another state, at a place within 100 miles of the
30 consumer's residence.
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1 (2) THE CONSUMER HAS MADE A GOOD FAITH ATTEMPT TO OBTAIN <--
2 SATISFACTORY RESOLUTION OF A DISAGREEMENT OR PROBLEM RELATIVE TO
3 THE TRANSACTION FROM THE SUPPLIER HONORING THE CREDIT CARD; AND
4 (3) WERE ACQUIRED IN THE SAME STATE AS THE MAILING ADDRESS
5 PREVIOUSLY PROVIDED BY THE CARD HOLDER OR WAS WITHIN 100 MILES
6 FROM SUCH ADDRESS.
7 THE AMOUNT OF CLAIMS OR DEFENSES ASSERTED BY THE THIRD PARTY
8 CREDIT CARD HOLDER SHALL NOT EXCEED THE AMOUNT OF CREDIT
9 OUTSTANDING WITH RESPECT TO SUCH TRANSACTION AT THE TIME THE
10 CARD HOLDER FIRST NOTIFIES THE CARD ISSUER OR THE PERSON
11 HONORING THE CREDIT CARD OF SUCH CLAIM OR DEFENSE. FOR THE
12 PURPOSE OF DETERMINING THE AMOUNT OF CREDIT OUTSTANDING IN THE
13 PRECEDING SENTENCE, PAYMENTS AND CREDITS TO THE CARD HOLDER'S
14 ACCOUNT ARE DEEMED TO HAVE BEEN APPLIED, IN THE ORDER INDICATED,
15 TO THE PAYMENT OF (I) LATE CHARGES IN THE ORDER OF THEIR ENTRY
16 TO THE ACCOUNT; (II) FINANCE CHARGES IN ORDER OF THEIR ENTRY TO
17 THE ACCOUNT; AND (III) DEBT TO THE ACCOUNT OTHER THAN THOSE SET
18 FORTH ABOVE, IN THE ORDER IN WHICH EACH DEBIT ENTRY TO THE
19 ACCOUNT WAS MADE.
20 (d) The contract or agreement of the related lender with the
21 consumer shall be subject to the provisions of section 4.
22 Section 11. Limitation on Liability of a Transferee or <--
23 Related Lender.--Goods or services purchased by use of a third
24 party credit card or on a revolving credit plan shall not be
25 deemed paid for until the occurrence of the earlier of (1) the
26 balance in the account is reduced to zero, or (2) the good or
27 service acquired would have been fully paid by the application
28 each month to the principal amount originally financed or
29 charged in respect of such good or service of the minimum
30 payment required for a credit of that amount by the rules of the
19750H0170B1978 - 16 -
1 credit card issuer or the person granting the revolving credit.
2 Section 12. 11. Prohibited Terms and Security Interests.-- <--
3 (a) No consumer transaction shall, except under a revolving
4 credit plan, have any scheduled payment including interest or
5 finance charge which is more than twice as large as the average
6 of the earlier scheduled payments unless the consumer has the
7 option to refinance the amount of that larger payment or
8 payments upon the same interest rate and other terms and without
9 penalty in further payments no larger than the average of the
10 payments preceding such larger payments.
11 (b) No security interest taken or reserved in a consumer
12 transaction shall attach to goods or services acquired in a
13 prior or subsequent consumer transaction with the same person
14 unless the contract or agreement provides that payments received
15 in respect of unpaid principal shall be applied first to the
16 unpaid principal amount due in respect of the unpaid debts first
17 incurred. To the extent that debts are paid according to this
18 subsection, security interests in items of property for which
19 such debts were first incurred shall terminate.
20 (c) No contract or agreement entered into in respect of a
21 consumer transaction shall grant a security interest in goods
22 not acquired from or financed by a direct loan from the same
23 secured party, but this section shall not apply to loans made by
24 a lender which is not a related lender with respect to the
25 transaction.
26 Section 13. 12. Consumer Property Exempt from Execution.-- <--
27 (a) In addition to the exemptions provided by other law the
28 following property shall be exempt from levy and sale under a
29 judgment other than a judgment on a purchase money security
30 interest, obtained in a proceeding arising out of a consumer
19750H0170B1978 - 17 -
1 transaction:
2 (1) All medical health equipment and supplies used for
3 health purposes by the debtor, the debtor's spouse and
4 dependents.
5 (2) Tools of the trade, including any income producing
6 property used in the principal occupation of the debtor, not to
7 exceed the value of $500.
8 (3) Clothing, and other wearing apparel, and furniture, <--
9 FURNITURE, furnishings, appliances and fixtures ordinarily and <--
10 generally used for household purposes in the principal residence
11 of the debtor to the value of $1,500 ; AND CLOTHING AND ORDINARY <--
12 WEARING APPAREL.
13 (b) The dollar values of all property coming within any <--
14 category of the exemption shall be initially estimated by the
15 officer making the levy, if an excess over the exemption is
16 asserted by the creditor. If the excess so determined is
17 disputed the officer making the levy shall forthwith impanel a
18 jury of three citizens from the vicinity who shall determine the
19 value of the property by a majority vote. If the amount of
20 excess or its existence is still disputed by the creditor the
21 value shall be determined by an impartial appraiser appointed by
22 the court and the creditor shall pay the fees and expenses of
23 the appraiser. As used in this subsection the term "value" means
24 the amount that would ordinarily be realized at an execution
25 sale of the property involved.
26 (c) (B) The exemptions provided in the preceding section <--
27 shall not prevent the levy upon and sale of property subject to
28 a purchase money security interest to satisfy a judgment
29 obtained for the unpaid purchase price, but after such levy and <--
30 sale, the fair market value of the property in the retail market
19750H0170B1978 - 18 -
1 for such property less 10% for costs of resale shall be credited
2 upon the debt, and not the price realized at the execution sale.
3 Any attempt to collect more than the amount remaining unpaid
4 after crediting such market value is a violation of this act.
5 NOR SHALL ANY PROVISION OF THIS ACT BE CONSTRUED TO AFFECT THE <--
6 RIGHT OF A SECURED PARTY TO REPOSSESS SUCH PROPERTY AND EXPOSE
7 IT TO SALE; HOWEVEVER, AFTER ANY SUCH SALE, AN AMOUNT EQUIVALENT
8 TO A FAIR MARKET VALUE OF SUCH PROPERTY AT THE TIME OF
9 REPOSSESSION, MINUS ACTUAL AND REASONABLE COSTS OF REPOSSESSION
10 AND SALE, SHALL BE CREDITED AGAINST THE TOTAL AMOUNT OF THE
11 SECURED DEBT. "FAIR MARKET VALUE" SHALL BE CONSTRUED TO MEAN THE
12 PRICE THAT WOULD INDUCE A WILLING SELLER TO SELL AND A WILLING
13 BUYER TO BUY THE PROPERTY IN A VOLUNTARY TRANSACTION.
14 (d) (C) At the time of making any levy upon the goods or <--
15 real estate of a consumer, the officer making the levy shall
16 give the consumer a notice setting forth the exemptions from
17 execution to which the consumer is entitled and shall not levy
18 upon any property specifically exempted or then designated by
19 the consumer as property to be retained within the dollar limits
20 of any exemption of property up to a specific dollar limit,
21 except, in each case where the judgment was obtained upon a debt
22 secured by a purchase money security interest in the particular
23 property.
24 (e) (D) No waiver of exemptions shall be effective. <--
25 Section 14. Civil Recoveries.--(a) When a finance charge is <--
26 involved in a consumer transaction any person who violates any
27 provision of this act shall be liable for each violation to each
28 consumer with respect to whom a violation is committed in an
29 amount equal to the damages actually suffered, but in any event
30 not less than the credit service charge plus 10% of the
19750H0170B1978 - 19 -
1 principal amount of the debt or the time price differential plus
2 10% of the cash price. The liability to each consumer under this
3 subsection shall not however, exceed $1,000 in the aggregate, in
4 respect of any one transaction.
5 (b) When a finance charge is not involved in a consumer
6 transaction any person who violates a provision of this act
7 shall be liable for each violation to each consumer with respect
8 to whom the violation is committed for the actual damages
9 suffered but in any event not less than 10% of the cash price or
10 total rental to be charged for each violation plus the sum of
11 $100 but the liability to each consumer in respect of any one
12 transaction shall not exceed $1000 under this subsection.
13 (c) In a successful action to recover for a violation of
14 this act, the consumer shall also recover the fees and expenses
15 of any necessary expert witnesses and a reasonable counsel fee
16 based on time reasonably spent without regard to the amount in
17 controversy but after taking into account the contingent nature
18 of consumer representation.
19 (d) The provisions of this section are subject to the
20 provisions of section 15 (b).
21 SECTION 13. CIVIL RECOVERIES.--ANY PERSON WHO VIOLATES ANY <--
22 PROVISION OF SECTIONS 4, 5 AND 6 OF THIS ACT SHALL BE LIABLE FOR
23 EACH VIOLATION TO EACH CONSUMER WITH RESPECT TO WHOM A VIOLATION
24 IS COMMITTED IN AN AMOUNT EQUAL TO THE DAMAGES ACTUALLY
25 SUFFERED, BUT IN ANY EVENT NOT LESS THAN THE FINANCE CHARGES OR
26 THE TIME PRICE DIFFERENTIAL.
27 Section 15. 14. Public Enforcement.--(a) Whenever the <--
28 Attorney General or any district attorney has reason to believe
29 that any person is using or is about to use any method, form of
30 contract, or act constituting a violation of PROHIBITED BY this <--
19750H0170B1978 - 20 -
1 act, and that proceedings would be in the public interest that
2 official may bring an action in the name of the Commonwealth
3 against such person to restrain by injunction the use of further
4 use of such method, form or contract or act. The action may be
5 brought in the court of common pleas in the county in which such
6 person resides, has a principal place of business or is doing
7 business in this Commonwealth, or it may be brought in the
8 Commonwealth Court. The courts are authorized upon proper proof
9 of the violation or proposed violation to issue temporary or
10 permanent injunctions, without bond, to prevent violations of
11 this act. The court may also, in a proper case, order
12 restitution to all injured consumers on such terms as justice
13 may require.
14 (b) Except where restitution is ordered, any such public <--
15 action shall not preclude private actions under section 14 but
16 where restitution is ordered, WHENEVER RESTITUTION IS ORDERED IN <--
17 ACCORDANCE WITH THIS SECTION AND ACTUALLY RECEIVED BY THE
18 CONSUMER, no further individual actions shall be commenced and,
19 on motion any pending action may be stayed or dismissed as
20 justice may require.
21 Section 16. 15. Duties of Attorney General and District <--
22 Attorneys.--The Attorney General shall have the power and it
23 shall be his duty to enforce this act. Each district attorney
24 shall have the power and it shall be his duty subject to the
25 general control of the Attorney General to enforce this act in
26 his district.
27 Section 17. 16. Effect on Other Acts.--(a) This act <--
28 supplements the act of August 14, 1963 (P.L.1082, No.464), known
29 as the "Home Improvement Finance Act," the act of October 28,
30 1966 (1st Sp.Sess., P.L.55, No.7), known as the "Goods and
19750H0170B1978 - 21 -
1 Services Installment Sales Act," and the act of June 28, 1947
2 (P.L.1110, No.476), known as the "Motor Vehicle Sales Finance
3 Act." The provisions of each act shall be construed as
4 harmonious except that in the case of any conflict the
5 provisions of this act shall control.
6 (b) In the case of conflict between the provisions of this
7 act and the provisions of the Uniform Commercial Code of
8 Pennsylvania, the provisions of this act shall control.
9 (c) Section 208 of the Home Improvement Finance Act and
10 section 402 of the Goods and Services Installment Sales Act are
11 hereby repealed absolutely.
12 Section 18. 17. Effective Date.--This act shall take effect <--
13 in 180 days.
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