Sec. 3. Definitions
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For purposes of this Act, the following definitions shall apply: The term advertisement means— a commercial message in any medium that promotes, directly or indirectly, a rental-purchase agreement; and does not include any price tag, window sign, or other in-store merchandising aid. The term agricultural purpose includes— the production, harvest, exhibition, marketing, transformation, processing, or manufacture of agricultural products by a natural person who cultivates plants or propagates or nurtures agricultural products; and the acquisition of farmlands, real property with a farm residence, or personal property and services used primarily in farming.
The term cash price means the price at which a merchant, in the ordinary course of business, offers to sell for cash the property that is the subject of the rental-purchase transaction. The term Commission means the Federal Trade Commission. The term consumer means a natural person who is offered or enters into a rental-purchase agreement. The term date of consummation means the date on which a consumer becomes contractually obligated under a rental-purchase agreement. The term initial payment means the amount to be paid before or at the consummation of the agreement, or the delivery of the property, if delivery occurs after consummation, including— the rental payment; service, processing, or administrative charges; any delivery fee; any refundable security deposit; taxes; mandatory fees or charges; and any optional fees or charges agreed to by the consumer.
The term merchant means a person who provides the use of property through a rental-purchase agreement in the ordinary course of business and to whom an initial payment by the consumer under the agreement is payable. The term payment schedule means the amount and timing of the periodic payments and the total number of all periodic payments that the consumer will make if the consumer acquires ownership of the property by making all periodic payments. The term periodic payment means the total payment that a consumer will make for a specific rental period after the initial payment, including the rental payment, taxes, mandatory fees or charges, and any optional fees or charges agreed to by the consumer.
The term property means property that is not real property under the laws of the State in which the property is located when it is made available under a rental-purchase agreement. The term rental payment means rent required to be paid by a consumer for the possession and use of property for a specific rental period, but does not include taxes or any fees or charges. The term rental period means a week, month, or other specific period of time, during which the consumer has a right to possess and use property that is the subject of a rental-purchase agreement after paying the rental payment and any applicable taxes for such period.
The term rental-purchase agreement means a contract in the form of a bailment or lease for the use of property by a consumer for an initial period of 4 months or less, that is renewable with each payment by the consumer, and that permits but does not obligate the consumer to become the owner of the property. The term rental-purchase agreement shall not be construed to be, nor be governed by laws regulating, any of the following: A credit sale (as defined in section 103(g) of the Truth in Lending Act (15 U.S.C. 1602(g))).
A consumer lease (as defined in section 181(1) of the Truth in Lending Act (15 U.S.C. 1667(1))). An extension of credit or a transaction giving rise to a debt incurred in connection with the purchase of a thing of value. For purposes of sections 1010 and 1011, the term rental-purchase cost means the sum of all rental payments and mandatory fees or charges imposed by the merchant as a condition of entering into a rental-purchase agreement or acquiring ownership of property under a rental-purchase agreement, such as— a service, processing, or administrative charge; a fee for an investigation or credit report; or a charge for delivery required by the merchant.
The following fees or charges shall not be taken into account in determining the rental-purchase cost with respect to a rental-purchase transaction: Fees and charges prescribed by law, which actually are or will be paid to public officials or government entities, such as sales tax. Fees and charges for optional products and services offered in connection with a rental-purchase agreement. The term State means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.
The term total cost means the sum of the initial payment and all periodic payments in the payment schedule to be paid by the consumer to acquire ownership of the property that is the subject of a rental-purchase agreement.
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