CHAPTER 421
CONSUMER TRANSACTIONS — GENERAL PROVISIONS AND DEFINITIONS
SUBCHAPTER I
SHORT TITLE, CONSTRUCTION,
GENERAL PROVISIONS
421.102 Purposes; rules of construction. 421.104 Construction against implied repeal. 421.106 Settlement of claims; agreement to forego rights; waiver. 421.107 Effect of chapters 421 to 427 on powers of organizations. 421.108 Obligation of good faith. SUBCHAPTER II
SCOPE AND JURISDICTION
421.201 Territorial application. 421.203 Partial exclusion for governmentally insured or guaranteed transactions. SUBCHAPTER III
DEFINITIONS
421.301 General definitions. SHORT TITLE, CONSTRUCTION,
GENERAL PROVISIONS
421.101421.101 Short title. Chapters 421 to 427 shall be known and may be cited as the Wisconsin consumer act. 421.101 HistoryHistory: 1971 c. 239. 421.101 AnnotationThe Wisconsin Consumer Act: Territorial Considerations. Anzivino. 96 MLR 833 (2013).
421.102421.102 Purposes; rules of construction. 421.102(1)(1) Chapters 421 to 427 shall be liberally construed and applied to promote their underlying purposes and policies. 421.102(2)(a)(a) To simplify, clarify and modernize the law governing consumer transactions; 421.102(2)(b)(b) To protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants; 421.102(2)(c)(c) To permit and encourage the development of fair and economically sound consumer practices in consumer transactions; and 421.102(2)(d)(d) To coordinate the regulation of consumer credit transactions with the policies of the federal consumer credit protection act. 421.102(3)(3) A reference to a provision of chs. 421 to 427 includes reference to a related rule or order of the administrator adopted under chs. 421 to 427. 421.102 HistoryHistory: 1971 c. 239; 1979 c. 89. 421.102 AnnotationWisconsin Consumer Act penalties are improper when the underlying contract is tainted with illegality. Shea v. Grafe, 88 Wis. 2d 538, 274 N.W.2d 670 (1979). 421.102 AnnotationThe Wisconsin Consumer Act may constitutionally regulate sales to residents by out-of-state mail order retailers. Aldens, Inc. v. LaFollette, 552 F.2d 745 (1977). 421.102 AnnotationWisconsin Consumer Act—A Critical Analysis. Heiser. 57 MLR 389 (1974).
421.102 AnnotationWisconsin Consumer Act—A Freak Out? Barrett & Jones. 57 MLR 483 (1974).
421.102 AnnotationProtection for Consumers Against Unfair and Deceptive Business. Jeffries. 57 MLR 559 (1974).
421.102 AnnotationThe Wisconsin Consumer Act: Wisconsin Consumer Credit Laws Before and After. Crandall. 1973 WLR 334.
421.102 AnnotationAn Overview of The Wisconsin Consumer Act. Stute. WBB Feb. 1973.
421.102 AnnotationPrivate enforcement of consumer laws in Wisconsin. Waxman. WBB May 1983.
421.102 AnnotationMandatory Arbitration of Consumer Rights Cases. Schneider & Quirk. Wis. Law. Sept. 2002.
421.102 AnnotationNavigating Wisconsin’s Consumer Protection System. Greene. Wis. Law. Sept. 2017.
421.103(1)(1) Unless superseded by the particular provisions of chs. 421 to 427, chs. 401 to 411 and the principles of law and equity, including the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause supplement chs. 421 to 427. 421.103(2)(2) Unless terms used in chs. 421 to 427 are defined by particular provisions of chs. 421 to 427, they shall have the meaning given them in chs. 401 to 411 and 429, if they are defined in chs. 401 to 411 and 429. 421.103(3)(3) Unless superseded by the particular provisions of chs. 421 to 427 parties to a consumer transaction have all of the obligations, duties, rights and remedies provided in chs. 401 to 411 which apply to the transaction. 421.104421.104 Construction against implied repeal. Chapters 421 to 427 being a general act intended as a unified coverage of the subject matter of such chapters, no part of chs. 421 to 427 shall be deemed to be impliedly repealed by subsequent legislation if such construction can reasonably be avoided. 421.104 HistoryHistory: 1971 c. 239; 1979 c. 89. 421.106421.106 Settlement of claims; agreement to forego rights; waiver. 421.106(1)(1) Except as otherwise provided in chs. 421 to 427, a customer may not waive or agree to forego rights or benefits under chs. 421 to 427. 421.106(2)(2) A claim by a customer against a merchant for an excess charge, other violation of chs. 421 to 427 or civil penalty, or a claim against a customer for default or breach of a duty imposed by chs. 421 to 427, if disputed in good faith, may be settled by agreement. 421.106(3)(3) A claim, whether or not disputed, against a customer may be settled for less value than the amount claimed. 421.106(4)(4) A settlement in which the customer waives or agrees to forego rights or benefits under chs. 421 to 427 is invalid if the court as a matter of law finds the settlement to be unconscionable at the time it was made. In this regard the court may consider the competence of the customer as measured by his or her education, ability to speak and read the language of the contract, and his or her prior consumer experience; any deception or coercion practiced upon the customer; the nature and extent of the legal advice received by the customer; and the value of the consideration. 421.106 HistoryHistory: 1971 c. 239; 1979 c. 89. 421.106 AnnotationThe holding in Concepcion, 563 U.S. 333 (2011), is clear: the Federal Arbitration Act preempts any state law, including sub. (1) and s. 426.110 (1), that classifies an arbitration agreement as unconscionable, and therefore unenforceable, simply because the agreement prohibits an individual from proceeding as a member of a class. Accordingly, under Concepcion, the waiver of classwide proceedings in the borrower’s arbitration agreement with the payday lender did not render the agreement substantively unconscionable. Cottonwood Financial, LTD v. Estes, 2012 WI App 12, 339 Wis. 2d 472, 810 N.W.2d 852, 09-0760. 421.107421.107 Effect of chapters 421 to 427 on powers of organizations. 421.107(1)(1) Except as specifically provided, chs. 421 to 427 prescribe maximum charges for all consumer credit transactions and displace existing limitations on the powers of creditors based on maximum charges. 421.107(2)(2) Except as specifically provided, with respect to sellers of goods or services, lessors of goods, small loan companies, licensed lenders, consumer and sales finance companies and commercial banks and trust companies, chs. 421 to 427 displace existing limitations on their powers based solely on amount or duration of credit. 421.107(3)(3) Except as provided in sub. (1), chs. 421 to 427 do not displace limitations on powers of credit unions, savings banks, savings and loan associations or other thrift institutions whether organized for the profit of shareholders or as mutual organizations. 421.107(4)(a)(a) Limitations on powers of supervised financial organizations (s. 421.301 (43)), with respect to the amount of a loan to a single borrower, the ratio of a loan to the value of collateral, the duration of a loan secured by an interest in land or other similar restrictions designed to protect deposits; or 421.107(4)(b)(b) Limitations on powers an organization is authorized to exercise under the laws of this state or the United States. 421.107 HistoryHistory: 1971 c. 239; 1979 c. 89. 421.108421.108 Obligation of good faith. Every agreement or duty within chs. 421 to 427 imposes an obligation of good faith in its performance or enforcement. “Good faith” means honesty in fact in the conduct or transaction concerned and the observance of reasonable commercial standards of fair dealing. 421.108 HistoryHistory: 1971 c. 239; 1979 c. 89. 421.108 AnnotationUnder this section, parties are obligated to act in good faith in the performance or enforcement of an agreement subject to the Wisconsin Consumer Act and to the performance or enforcement of a provision of the Act. Further, the honesty-in-fact requirement is violated when a party lacks an honest intention to abstain from taking unfair advantage of another by activities that render the transaction unfair, and the fair-dealing requirement is violated when a party does not observe reasonable commercial standards of fair dealing, which contemplates the application of an objective set of standards. CreditBox.com, LLC v. Weathers, 2023 WI App 37, 408 Wis. 2d 715, 993 N.W.2d 802, 22-0746. SCOPE AND JURISDICTION
421.201421.201 Territorial application. 421.201(1)(1) Except as otherwise provided in this section, chs. 421 to 427 apply to consumer transactions made in this state and to modifications including refinancings, consolidations and deferrals, made in this state, of consumer credit transactions wherever made. 421.201(2)(2) For the purposes of chs. 421 to 427, a consumer transaction or modification of a consumer transaction is made in this state if: 421.201(2)(a)(a) A writing signed by the customer and evidencing the obligation or an offer of the customer is received by the merchant in this state; or 421.201(2)(b)(b) The merchant induces the customer who is a resident of this state to enter into the transaction by face-to-face solicitation or by mail or telephone solicitation directed to the particular customer in this state. 421.201(3)(3) With respect to a transaction pursuant to an open-end credit plan, chs. 421 to 427 apply if the customer is a resident of this state and the open-end creditor or a merchant honoring a credit card issued by the open-end creditor, is a resident of this state or furnishes, mails or delivers the goods, services or credit to a resident of this state while the customer is within this state or receives a writing signed by the customer and evidencing the transaction in this state. 421.201(4)(4) Chapter 427 applies to any debt collection activity in this state, including debt collection by means of mail or telephone communications directed to customers in this state. 421.201(5)(5) Subchapters I and II of ch. 425, relating to creditors’ remedies, including applicable penalties, apply to actions or other proceedings brought in this state to enforce rights arising from consumer transactions or extortionate extensions of credit, wherever made, but conduct, action or proceedings to recover collateral or goods subject to a motor vehicle consumer lease shall be governed by the law of the state where the collateral or goods subject to a motor vehicle consumer lease are located at the time of recovery unless the collateral or goods subject to a motor vehicle consumer lease are owned by a Wisconsin resident, who has removed the collateral or goods from this state only for purposes of transportation to or use in the resident’s employment or for temporary periods which do not exceed 15 days. 421.201(6)(6) If a consumer transaction, or modification thereof, is made in another state with a customer who is a resident of this state when the transaction or modification is made, the following provisions apply as though the transaction occurred in this state: 421.201(6)(a)(a) A creditor, or assignee of the creditor’s rights, may collect through actions or other proceedings charges only to the extent permitted by ch. 422; and 421.201(6)(b)(b) A merchant may not enforce rights against the customer to the extent that the provisions of the agreement violate subch. IV of ch. 422 or ch. 423. 421.201(7)(7) Except as provided in sub. (4) or (5), a consumer transaction or modification thereof, made in another state with a customer who was not a resident of this state when the consumer transaction or modification was made, is valid and enforceable in this state according to its terms to the extent that it is valid and enforceable under the laws of the state applicable to the transaction. 421.201(8)(8) For the purposes of chs. 421 to 427, the residence of a customer is the address given by the customer as his or her residence in any writing signed by the customer in connection with a consumer transaction. The given address is presumed to be unchanged until the merchant knows or has reason to know of a new or different address. 421.201(9)(9) Notwithstanding other provisions of this section: 421.201(9)(a)(a) Except as provided in sub. (4) or (5), chs. 421 to 427 do not apply if the customer is not a resident of this state at the time of a consumer transaction and the parties then agree that the law of his or her residence applies; and
