§14A-2-313. Advertising.
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(1)No seller or lessor shall engage in this state in false or misleading advertising concerning the terms or conditions of credit with respect to a consumer credit sale or consumer lease.
(2)Without limiting the generality of subsection
(1)of this section and without requiring a statement of rate of credit service charge if the credit service charge is not more than Five Dollars ($5.00) when the amount financed does not exceed Seventy-five Dollars ($75.00), or Seven Dollars and fifty cents ($7.50) when the amount financed exceeds Seventy-five Dollars ($75.00), an advertisement with respect to a consumer credit sale made by the posting of a public sign, or by catalog, magazine, newspaper, radio, television or similar mass media, is misleading if:
(a)it states the rate of credit service charge and the
rate is not stated in the form required by the
provisions on calculation of rate to be disclosed
under Section 2-304 of this title; or
it states the dollar amounts of the credit service
charge or installment payments, and does not also
state the rate of any credit service charge, the
downpayment, if any, and the terms of repayment.
(3)In this section a catalog or other multiple-page advertisement is considered a single advertisement if it clearly and conspicuously displays a credit terms table setting forth the information required by this section.
(4)This section imposes no liability on the owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated.
(5)Advertising which complies with the Federal Consumer Credit Protection Act does not violate subsection
(2)of this section.
(6)The provisions of this section do not apply to advertisements of residential real estate except to the extent required by Administrator's rule.
(7)If any advertisement to aid, promote, or assist, directly or indirectly, the extension of consumer credit through a revolving charge account plan under which extensions of credit are secured by the consumer's principal dwelling states, affirmatively or negatively, any of the specific terms of the plan, including any periodic payment amount required under such plan, such advertisement shall also clearly and conspicuously set forth the following information, in such form and manner as the Administrator may require:
(a)Any fee the amount of which is determined as a
percentage of the credit limit applicable to an
account under the plan and an estimate of the
aggregate amount of other fees for opening the
account, based on the creditor's experience with the
plan and stated as a single amount or as a reasonable
range;
(b)In any case in which periodic rates may be used to
compute the credit service charge, the periodic rates
expressed as an annual percentage rate;
(c)The highest annual percentage rate which may be
imposed under the plan; and
(d)Any other information the Administrator may by rule
require.
(8)If any advertisement described in subsection
(7)of this section contains a statement that any interest expense incurred with respect to the plan is or may be tax deductible, the advertisement shall not be misleading with respect to such deductibility.
(9)No advertisement described in subsection
(7)of this section with respect to any home equity account may refer to such credit as "free money" or use other terms determined by the Administrator by rule to be misleading.
(a)If any advertisement described in subsection
(7)of
this section includes an initial annual percentage
rate that is not determined by the index or formula
used to make later interest rate adjustments, the
advertisement shall also state with equal prominence
the current annual percentage rate that would have
been applied using the index or formula if such
initial rate had not been offered;
(b)The annual percentage rate required to be disclosed
under the paragraph
(a)rate of this subsection rate
must be current as of a reasonable time given the
media involved; and
(c)Any advertisement to which paragraph
(a)of this
subsection applies shall also state the period of time
during which the initial annual percentage rate
referred to in such paragraph will be in effect.
(11)If any advertisement described in subsection
(7)of this section contains a statement regarding the minimum monthly payment under the plan, the advertisement shall also disclose, if applicable, the fact that the plan includes a balloon payment.
(12)For purposes of this section and Section 2-310.2 of this title, the term "balloon payment" means, with respect to any revolving charge account plan under which extensions of credit are secured by the consumer's principal dwelling, any repayment option under which:
(a)the account holder is required to repay the entire
amount of any outstanding balance as of a specified
date or at the end of a specified period of time, as
determined in accordance with the terms of the
agreement pursuant to which such credit is extended;
and
(b)the aggregate amount of the minimum periodic payments
required would not fully amortize such outstanding
balance by such date or at the end of such period.
(a)If an advertisement for a consumer lease includes a
statement of the amount of any payment or a statement
that any or no initial payment is required, the
advertisement shall clearly and conspicuously state,
as applicable:
(i)the transaction advertised is a lease;
(ii)the total amount of any initial payments required
on or before consummation of the lease or
delivery of the property, whichever is later;
(iii)that a security deposit is required;
(iv)the number, amount, and timing of scheduled
payments; and
with respect to a lease in which the liability of
the consumer at the end of the lease term is
based on the anticipated residual value of the
property, that an extra charge may be imposed at
the end of the lease term.
(b)No owner or employee of any entity that serves as a
medium in which an advertisement appears or through
which an advertisement is disseminated, shall be liable
under this subsection.
(i)An advertisement by radio broadcast to aid,
promote, or assist, directly or indirectly, any
consumer lease shall be deemed to be in
compliance with the requirements of paragraph
of this subsection if such advertisement clearly
and conspicuously:
(aa)states the information required by
subparagraphs
(i)and
(ii)of paragraph
of this subsection;
(bb)states the number, amounts, due dates or
periods of scheduled payments, and the total
of such payments under the lease;
(cc)includes:
(I)a referral to:
(A)a toll-free telephone number
established in accordance with
subparagraph
(ii)of this
paragraph that may be used by
consumers to obtain the
information required under
paragraph
(a)of this subsection;
or
(B)a written advertisement that
appears in a publication in
general circulation in the
community served by the radio
station on which such
advertisement is broadcast during
the period beginning three
days before any such broadcast and
ending ten
(10)days after such
broadcast and includes the
information required to be
disclosed under paragraph
(a)of
this subsection; and
(II)the name and dates of any publication
referred to in clause
(B)of
subdivision
(I)of this division; and
(dd)any other information which the
Administrator determines necessary.
(ii)In the case of a radio broadcast advertisement
described in subparagraph
(i)of this paragraph
that includes a referral to a toll-free telephone
number, the lessor who offers the consumer lease
shall:
(aa)establish such a toll-free telephone number
not later than the date on which the
advertisement including the referral is
broadcast;
(bb)maintain such telephone number for a period
of not less than ten
(10)days, beginning on
the date of any such broadcast; and
(cc)provide the information required under
paragraph
(a)of this subsection with
respect to the lease to any person who calls
such number.
The information required to be provided in division
(cc)of this subparagraph shall be provided verbally or, if requested by the consumer, in written form.
Nothing in this paragraph shall affect the requirements of law as such requirements apply to advertisement by any medium other than radio broadcast. Added by Laws 1969, c. 352, § 2-313, eff. July 1, 1969. Amended by Laws 1982, c. 335, § 23, operative Oct. 1, 1982; Laws 1990, c. 260, § 16, operative July 1, 1990; Laws 2000, c. 217, § 4, eff. July 1, 2000.