The Wisconsin Consumer Act: Consumer Credit Sales, Consumer Leases, Open-End Credit Plans, and Exclusions. Anzivino. 97 MLR 55 (No. 1 2013).
do not apply to any of the following:
Charges for delayed payment and any discount allowed for early payment in transactions under public utility or common carrier tariffs if a subdivision or agency of this state or of the United States regulates such charges or discounts, or if such charges or discounts are made in connection with the furnishing of electric service by an electric cooperative organized and operating on a nonprofit basis under ch. 185
The ceilings on rates and charges of a licensed pawnbroker if these ceilings are established by statute or ordinance.
The sale of insurance by an insurer, except as otherwise provided in ch. 424
Consumer credit transactions in which the amount financed exceeds $25,000, motor vehicle consumer leases in which the total lease obligation exceeds $25,000 or other consumer transactions in which the cash price exceeds $25,000.
Transactions secured by a first lien real estate mortgage or equivalent security interest.
Transactions in securities accounts or securities transactions by or with a broker-dealer, as defined in s. 551.102 (4)
, registered under ch. 551
Transactions that are primarily for an agricultural purpose, except that this subsection does not exclude transactions that are primarily for an agricultural purpose from ch. 427
and except that this subsection does not exclude credit transactions that are primarily for an agricultural purpose from s. 422.210
Consumer leases are subject to the exclusionary provision of sub. (6). “Amount financed" means the purchase price or cash price for property leased. American Industrial Leasing Co. v. Geiger, 118 Wis. 2d 140
, 345 N.W.2d 527
(Ct. App. 1984).
Partial exclusion for governmentally insured or guaranteed transactions. 421.203(1)(1)
Consumer credit transactions, not governed by ch. 428
, which are made, insured or guaranteed by the federal government or any agency thereof, or by any federal instrumentality chartered under the federal farm credit act of 1971 (P.L. 92-181
; 85 stats. 583; 12 USC 2001
et seq.), or by the department of veterans affairs shall be subject to only those provisions set forth in sub. (2)
In addition to definitions appearing in chs. 422
, in chs. 421
“Actuarial method" means the method, defined by rules adopted by the administrator, of allocating payments made on a debt between amount financed and finance charge, pursuant to which a payment is applied first to the accumulated finance charge and the balance is applied to the unpaid amount financed.
“Agreement" means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance. Sections 402.202
and any other provisions on parol or extrinsic evidence shall be inoperative to exclude or limit the admissibility of evidence relating to agreements governed by chs. 421
“Agricultural purpose" means a purpose related to the production, harvest, exhibition, marketing, transportation, processing or manufacture of agricultural products by a person, other than an organization, which cultivates, plants, propagates or nurtures those agricultural products. “Agricultural products" includes agricultural, horticultural, viticultural and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof, including processed and manufactured products, and any and all products raised or produced on farms and any processed or manufactured products thereof.
“Amount financed" in a consumer credit transaction means the total of the following items from which any prepaid finance charge or required deposit balance has been excluded:
In a consumer credit sale, the cash price of the real or personal property or services, less the amount of any down payment whether made in cash or in property traded in, or, in a consumer loan, the amount paid to, receivable by or paid or payable to the customer or to another person in the customer's behalf;
In a consumer credit sale, the amount actually paid or to be paid by the creditor pursuant to an agreement with the customer to discharge a security interest in or a lien on property traded in; and
Any applicable sales, use, excise or documentary stamp taxes;
Amounts actually paid or to be paid by the creditor for registration, certificate of title or license fees; and
“Business day" means any calendar day except Saturday and Sunday, and except the following business holidays: New Year's Day, Martin Luther King Jr.'s Birthday, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving and Christmas.
“Cash price" means the price at which property or services are offered, in the ordinary course of business, for sale for cash, and may include:
The cash price of accessories or services related to the sale such as delivery, installation, alterations, modifications and improvements; and
“Conspicuous" means that the term or clause is so written that a reasonable person against whom it is to operate ought to have noticed it. Whether a term or clause is conspicuous or not is for decision by the court.
“Consumer credit sale" means a sale of goods, services or an interest in land to a customer on credit where the debt is payable in installments or a finance charge is imposed and includes any agreement in the form of a bailment of goods or lease of goods or real property if the bailee or lessee pays or agrees to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the goods or real property involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the goods or real property upon full compliance with the terms of the agreement.
“Consumer credit transaction" means a consumer transaction between a merchant and a customer in which real or personal property, services or money is acquired on credit and the customer's obligation is payable in installments or for which credit a finance charge is or may be imposed, whether such transaction is pursuant to an open-end credit plan or is a transaction involving other than open-end credit. The term includes consumer credit sales, consumer loans, consumer leases and transactions pursuant to open-end credit plans.
“Consumer lease" means a lease of goods which a merchant makes to a customer for a term exceeding 4 months.
See also s. DFI-WCA 1.05
, Wis. adm. code.
“Consumer loan" means a loan made by a lender to a customer which is payable in installments or for which a finance charge is or may be imposed, and includes transactions pursuant to an open-end credit plan other than a seller credit card.
“Consumer transaction" means a transaction in which one or more of the parties is a customer for purposes of that transaction.
“Credit" means the right granted by a creditor to a customer to defer payment of debt, to incur debt and defer its payment or to purchase goods, services or interests in land on a time price basis.
“Credit card" means any card, plate, merchandise certificate, letter of credit, coupon book or other like credit device existing for the purpose of obtaining money, property, labor or services on credit pursuant to an open-end credit plan.
“Creditor" means a merchant who regularly engages in consumer credit transactions or in arranging for the extension of consumer credit by or procuring consumer credit from 3rd persons.
“Customer" means a person other than an organization (s. 421.301 (28)
) who seeks or acquires real or personal property, services, money or credit for personal, family or household purposes or, for purposes of ch. 427
only, for agricultural purposes. A person other than a customer may agree to be governed by chs. 421
with respect to all aspects of a transaction and in such event such person shall be deemed a customer for all purposes of chs. 421
with respect to such transaction.
See also s. DFI-WCA 1.06
, Wis. adm. code.
“Earnings" means compensation paid or payable to an individual or for the individual's account for personal services rendered or to be rendered by the individual, whether denominated as wages, salary, commission, bonus or otherwise, and includes periodic payments pursuant to a pension, retirement or disability program. “Earnings" does not include renewal commissions payable to a licensed insurance agent.
“Federal consumer credit protection act" means the consumer credit protection act (P.L. 90-321
; 82 Stat. 146), as amended, and includes regulations issued pursuant to that act.
“Finance charge" means the sum of all charges, payable directly or indirectly by the customer as an incident to or as a condition of the extension of credit, whether paid or payable by the customer, the creditor or any other person on behalf of the customer to the creditor or to a 3rd party unless the creditor had no notice or knowledge of the charges paid or payable to the 3rd party. The term does not include any charge with respect to a motor vehicle consumer lease. The term includes the following types of charges to the extent they are not permitted additional charges under s. 422.202
, delinquency charges under s. 422.203
or deferral charges under s. 422.204
Interest, time price differential and any amount payable under a discount or other system of additional charges;
Fee for an appraisal, investigation or credit report;
Any charge imposed by a creditor upon another creditor for purchasing or accepting an obligation of a customer if the customer is required to pay any part of that charge in cash, as an addition to the obligation or as a deduction from the proceeds of the obligation;
Premium or other charge for guarantee or insurance protecting the creditor against the customer's default or other credit loss;
Charges or premiums for credit life, accident or health insurance, written in connection with any consumer credit transaction to the extent they are not permitted as additional charges under s. 422.202
Charges or premiums for insurance, written in connection with any action against loss of or damage to property or against liability arising out of the ownership or use of property to the extent they are not permitted as additional charges under s. 422.202
See also s. DFI-WCA 1.07
, Wis. adm. code.
“Goods" has the meaning given in s. 409.102 (1) (ks)
and includes goods not in existence at the time the transaction is entered into and goods which are or are to become fixtures.
“Lender" means a merchant regularly engaged in the business of making consumer loans.
The creation of debt by the lender's payment of or agreement to pay money to the customer or to a 3rd party for the account of the customer;
The creation of debt by a credit to an account with the lender upon which the customer is entitled to draw immediately;
The creation of debt pursuant to a credit card or similar arrangement other than pursuant to a seller credit card;
The forbearance by a lender of debt arising from a loan.
“Merchandise certificate" means a writing issued by a seller not redeemable in cash and usable in its face amount in lieu of cash in exchange for goods or services.
“Merchant" means a person who regularly advertises, distributes, offers, supplies or deals in real or personal property, services, money or credit in a manner which directly or indirectly results in or is intended or designed to result in, lead to or induce a consumer transaction. The term includes but is not limited to a seller, lessor, manufacturer, creditor, arranger of credit and any assignee of or successor to such person. The term also includes a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to such practices or to whom such knowledge or skill may be attributed by his or her employment as an agent, broker or other intermediary.
Fees and charges which actually are or actually will be paid for determining the existence of or for perfecting a security interest related to a consumer credit transaction to the extent that such fees and charges do not exceed those fees and charges prescribed by law for payment to public officials; and
Premiums payable for insurance in lieu of perfecting a security interest otherwise required by the creditor in connection with the consumer credit transaction, if the premium does not exceed the amount payable to the insurer and the fees and charges described in par. (a)
which would otherwise be payable.
“Open-end credit plan" means consumer credit extended on an account pursuant to a plan under which:
The creditor may permit the customer to make purchases or obtain loans, from time to time, directly from the creditor or indirectly by use of a credit card, check or other device, as the plan may provide;
The customer has the privilege of paying the balance in full or in installments;
A finance charge may be computed by the creditor from time to time on an outstanding unpaid balance; and
The creditor has treated the transaction as open-end consumer credit for purposes of any disclosures required under the federal consumer credit protection act.
The term does not include negotiated advances under an open-end real estate mortgage or a letter of credit.
A credit plan shall not be considered an open-end credit plan, even though it meets the criteria listed in par. (a) 1.
, if the creditor treats the transaction as other than open-end credit for each extension of credit for purposes of any disclosures required under the federal consumer credit protection act.
“Organization" means a corporation, government or governmental subdivision or agency, trust, estate, limited liability company, partnership, cooperative or association other than a cooperative organized under ch. 185
which has gross annual revenues not exceeding $5 million.
“Other than open-end credit" means consumer credit other than an open-end credit plan itself, or other than consumer credit transactions pursuant to an open-end credit plan, and includes precomputed transactions.
“Payable in installments" means that payment is required or permitted by agreement to be made in:
Two or more installments, excluding the down payment in a consumer credit sale, with respect to an obligation arising from a consumer credit transaction for which a finance charge is or may be imposed;
More than 4 installments, excluding the down payment in a consumer credit sale, in any other consumer credit transaction; or
Two or more installments if any installment other than the down payment is more than twice the amount of any other installment, excluding the down payment.
“Person" includes a natural person, and an organization.