Amended in Assembly April 24, 2014

Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2667

Introduced by Assembly Member Bloom

February 21, 2014

An act to amend Section 1812.622 of, and to add Section 1812.650 to, the Civil Code, relating to electronic devices.

LEGISLATIVE COUNSEL’S DIGEST

AB 2667, as amended, Bloom. Rental-purchase agreements: electronic devices: monitoring technology.

Existing law, the Karnette Rental-Purchase Act, provides for the regulation of rental-purchase agreements, as defined. Existing law requires rental-purchase agreements to contain specified notices, including, among other things, information on costs and terms of payment. Existing law makes it a misdemeanor to willfully violate the provisions regulating rental-purchase agreements.

This bill would add to these provisions regulating rental-purchase agreements provisions requiring a lessor to provide clear and prominent notice to a consumer and obtain express consent from the consumer at the time the lessor and the consumer enter into a rental-purchase agreement for an electronic device if that device has geophysical location tracking technology installed and would prohibit a lessor from installing the technology without providing clear and prominent notice and obtaining express consent from the consumer. The bill would prohibit a lessor from using begin insert , selling, or sharing end insert geophysical location tracking technology on an electronic device for any purpose other than to prevent fraud begin insert or loss end insert . The bill would prohibit a lessor from using begin insert or installing end insert monitoring technology on an electronic device. begin insert The bill would provide for the expiration of and notification related to geophysical location tracking technology. The bill would provide for remote technical assistance, as specified. end insert

Because a willful violation of these provisions would be a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1812.622 of the Civil Code is amended
to read:

1812.622.  

As used in this title:

(a) “Advertisement” means a commercial message in any
medium that directly or indirectly solicits or promotes one or more
specific rental-purchase transactions, excluding instore
merchandising aids. This definition does not limit or alter the
application of other laws, including Chapter 5 (commencing with
Section 17200) of Part 2 and Chapter 1 (commencing with Section
17500) of Part 3, of Division 7 of the Business and Professions
Code, to rental-purchase transactions.

(b) “Consumer” means a natural person or persons who rent or
lease personal property from a lessor pursuant to a rental-purchase
agreement or to whom a lessor offers personal property for use
pursuant to a rental-purchase agreement.

(c) “Lessor” means any person or entity that provides or offers
to provide personal property for use by consumers pursuant to a
rental-purchase agreement.

(d) “Rental-purchase agreement,” except as otherwise provided
in this subdivision, means an agreement between a lessor and a
consumer pursuant to which the lessor rents or leases, for valuable
consideration, personal property for use by a consumer for personal,
family, or household purposes for an initial term not exceeding
four months that may be renewed or otherwise extended, if under
the terms of the agreement the consumer acquires an option or
other legally enforceable right to become owner of the property.
A rental-purchase agreement is a lease subject to Title 1.5
(commencing with Section 1750) and Title 1.7 (commencing with
Section 1790).

“Rental-purchase agreement” shall not be construed to be, nor
be governed by, and shall not apply to, any of the following:

(1) A retail installment sale, as defined in Section 1802.5.

(2) A retail installment contract, as defined in Section 1802.6.

(3) A retail installment account, as defined in Section 1802.7.

(4) A lease or agreement that constitutes a security interest, as
defined in Section 1201 of the Commercial Code.

(5) A consumer credit contract, as defined in Section 1799.90.

(e) “Cash price” means the price of the personal property
described in the rental-purchase agreement that the consumer may
pay in cash to the lessor at the inception of the rental-purchase
agreement to acquire ownership of that personal property.

(f) “Cost of rental” means the difference between the total of
all periodic payments necessary to acquire ownership under the
rental-purchase agreement and the cash price of the rental property
that is subject to the rental-purchase agreement.

(g) “Fee” means any payment, charge, fee, cost, or expense,
however denominated, other than a rental payment.

(h) “Appliance” means and includes any refrigerator, freezer,
range including any cooktop or oven, microwave oven, washer,
dryer, dishwasher, or room air-conditioner or air purifier.

(i) “Electronic set” means and includes any television, radio,
camera, video game, or any type of device for the recording,
storage, copying, printing, transmission, display, or playback of
any sound or image, but does not include any item that is part of
a computer system.

(j) “Computer system” means a computer processor and a video
monitor, printer, and peripheral items primarily designed for use
with a computer. Audio and video devices, which are commonly
used for entertainment and into which data may be downloaded
from a computer, are not part of a computer system.

(k) “Lessor’s cost” means the documented actual cost, including
actual freight charges, of the rental property to the lessor from a
wholesaler, distributor, supplier, or manufacturer and net of any
discounts, rebates, and incentives.

(l) “Total of payments” means the total amount of periodic
payments necessary to acquire ownership of the property that is
the subject of the rental-purchase agreement if the consumer makes
all regularly scheduled payments.

(m) “Electronic device” means a desktop or laptop computer,
handheld device, tablet, smart phone, or other electronic product
or device that has a platform on which to download, install, or run
any software program, code, script, or other content.

(n) “Clear and prominent notice” means notice presented in an
understandable language and syntax, in the predominantly used
language for that communication, and that:

(1) In textual communications, the required disclosures are
begin insert separate and apart from a privacy policy, data use policy, terms
of service, end-user license agreement, lease agreement, or other
similar document, and end insert of a type, size, and location sufficiently
noticeable for an ordinary consumer to read and comprehend in
print that contrasts highly with the background on which they
appear.

(2) In communications disseminated orally or through audible
means, the required disclosures are delivered in a volume and
cadence sufficient for an ordinary consumer to hear and
comprehend.

(3) In communications disseminated through video means, the
required disclosures are in writing in a form consistent with
paragraph (1) and appear on the screen for a duration sufficient
for an ordinary consumer to read and comprehend them, and in
the same language as the predominantly used language for that
communication.

(4) In communications made through interactive media,
including the Internet, online services, and software, the required
disclosures are unavoidable and presented in a form consistent
with paragraph (1), in addition to any audio or video presentation.

(o) “Geophysical location tracking technology” means hardware,
software, or an application that collects and reports data or
information that identifies the precise geophysical location of an
item, including, technologies that report the GPS coordinates of begin delete a
computer or other item end delete begin insert an electronic device end insert , the WiFi signals
available to or actually used by begin delete a computer end delete begin insert an electronic device end insert
to access the Internet, the telecommunication towers or connections
available to or actually used by a computer, the processing of any
reported data or information through geolocation lookup services,
or any information derived from any combination of the foregoing.

(p) “Monitoring technology” means any hardware, software, or
application utilized in conjunction with a computer that can cause
the computer to capture, monitor, record, or report information
about user activities begin delete by recording keystrokes, clicks, or other
user-generated actions, capturing screenshots of the information
displayed on a computer monitor or screen, or activating the camera
or microphone function of a computer to take photographs or record
audio or visual content through the computer’s Internet Webcam
or microphone. end delete begin insert without the user’s knowledge. end insert

begin insert

(q) “Remote technical assistance” means collaborative access
by the user and technician to connect to an electronic device for
the purpose of providing technical support to the user.

end insert begin insert

(r) “Express consent” means a clear choice to either agree or
not agree to any geophysical location tracking technology or
remote technical assistance. Express consent does not include
consent given when either option is highlighted or preselected as
a default setting.

end insert begin insert

(s) “Fraud” means an action by the consumer that necessitates
the lessor’s recovery of the electronic device, limited to
nonpayment or another breach of the rental-purchase agreement.

end insert

SEC. 2.  

Section 1812.650 is added to the Civil Code, to read:

1812.650.  

(a) A lessor shall provide clear and prominent notice
to a consumer and obtain express consent from the consumer at
the time the lessor and the consumer enter into a rental-purchase
agreement for an electronic device if that device has geophysical
location tracking technology begin delete installed. end delete begin insert installed, and at any time
the geophysical location tracking technology is activated. end insert A lessor
shall not install geophysical location tracking technology on an
electronic device without first providing clear and prominent notice
to the consumer and obtaining express consent.

(b) A lessor shall not use begin insert , sell, or share end insert geophysical location
tracking technology on an electronic device for any purpose other
than the prevention of fraud begin insert or loss end insert .

begin insert

(c) Clear and prominent notification shall be displayed on an
electronic device if geophysical location tracking technology is
activated.

end insert begin insert

(d) A lessor shall provide that any geophysical location tracking
technology that has been installed on an electronic device, or can
be activated by the lessor, expires following the lease period or
upon completion of the purchase of the electronic device.

end insert begin delete

(c)

end delete

begin insert (e) end insert  A lessor shall not use begin insert or install end insert monitoring technology on
an electronic device for any purpose.

begin insert

(f) A lessor shall provide clear and prominent notice to a
consumer and obtain express consent from the consumer for the
installation of any software that allows the use of remote technical
assistance and upon the activation and deactivation of any remote
technical assistance when requested by the consumer.

end insert begin insert

(g) A lessor shall not acquire any data when providing remote
technical assistance beyond what is necessary to provide assistance
to the user and beyond what the user has consented to. Any data
acquired during the period of consumer consented technical
assistance shall not be retained, used, or sold for any purpose.

end insert

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.