Amended in Senate August 13, 2014

Amended in Senate June 15, 2014

Amended in Assembly April 24, 2014

Amended in Assembly March 27, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 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 by the lessor 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, selling, or sharing geophysical location tracking technology on an electronic device for any purpose other than the repossession of the electronic device when there is a violation of the rental-purchase agreement, pursuant to the law, or when requested by the consumer. The bill would prohibit a lessor from using or installing monitoring technology on an electronic device for any purpose other than to provide remote technical assistance when requested by the consumer. The bill would provide for the expiration of and notification related to geophysical location tracking technology.

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:

P2    1

SECTION 1.  

Section 1812.622 of the Civil Code is amended
2to read:

3

1812.622.  

As used in this title:

4(a) “Advertisement” means a commercial message in any
5medium that directly or indirectly solicits or promotes one or more
6specific rental-purchase transactions, excluding instore
7merchandising aids. This definition does not limit or alter the
8application of other laws, including Chapter 5 (commencing with
9Section 17200) of Part 2 and Chapter 1 (commencing with Section
1017500) of Part 3, of Division 7 of the Business and Professions
11Code, to rental-purchase transactions.

12(b) “Consumer” means a natural person or persons who rent or
13lease personal property from a lessor pursuant to a rental-purchase
14agreement or to whom a lessor offers personal property for use
15 pursuant to a rental-purchase agreement.

16(c) “Lessor” means any person or entity that provides or offers
17to provide personal property for use by consumers pursuant to a
18rental-purchase agreement.

P3    1(d) “Rental-purchase agreement,” except as otherwise provided
2in this subdivision, means an agreement between a lessor and a
3consumer pursuant to which the lessor rents or leases, for valuable
4consideration, personal property for use by a consumer for personal,
5family, or household purposes for an initial term not exceeding
6four months that may be renewed or otherwise extended, if under
7the terms of the agreement the consumer acquires an option or
8other legally enforceable right to become owner of the property.
9A rental-purchase agreement is a lease subject to Title 1.5
10(commencing with Section 1750) and Title 1.7 (commencing with
11Section 1790).

12“Rental-purchase agreement” shall not be construed to be, nor
13be governed by, and shall not apply to, any of the following:

14(1) A retail installment sale, as defined in Section 1802.5.

15(2) A retail installment contract, as defined in Section 1802.6.

16(3) A retail installment account, as defined in Section 1802.7.

17(4) A lease or agreement that constitutes a security interest, as
18defined in Section 1201 of the Commercial Code.

19(5) A consumer credit contract, as defined in Section 1799.90.

20(e) “Cash price” means the price of the personal property
21described in the rental-purchase agreement that the consumer may
22pay in cash to the lessor at the inception of the rental-purchase
23agreement to acquire ownership of that personal property.

24(f) “Cost of rental” means the difference between the total of
25all periodic payments necessary to acquire ownership under the
26rental-purchase agreement and the cash price of the rental property
27that is subject to the rental-purchase agreement.

28(g) “Fee” means any payment, charge, fee, cost, or expense,
29however denominated, other than a rental payment.

30(h) “Appliance” means and includes any refrigerator, freezer,
31range including any cooktop or oven, microwave oven, washer,
32dryer, dishwasher, or room air-conditioner or air purifier.

33(i) “Electronic set” means and includes any television, radio,
34camera, video game, or any type of device for the recording,
35storage, copying, printing, transmission, display, or playback of
36any sound or image, but does not include any item that is part of
37a computer system.

38(j) “Computer system” means a computer processor and a video
39monitor, printer, and peripheral items primarily designed for use
40with a computer. Audio and video devices, which are commonly
P4    1used for entertainment and into which data may be downloaded
2from a computer, are not part of a computer system.

3(k) “Lessor’s cost” means the documented actual cost, including
4actual freight charges, of the rental property to the lessor from a
5wholesaler, distributor, supplier, or manufacturer and net of any
6discounts, rebates, and incentives.

7(l) “Total of payments” means the total amount of periodic
8payments necessary to acquire ownership of the property that is
9the subject of the rental-purchase agreement if the consumer makes
10all regularly scheduled payments.

11(m) “Electronic device” means a desktop or laptop computer,
12handheld device, tablet, smartphone, or other electronic product
13or device that has a platform on which to download, install, or run
14any software program, code, script, or other content.

15(n) “Geophysical location tracking technology” means hardware,
16software, or an application that collects and reports data or
17information that identifies the precise geophysical location of an
18item, including technologies that report the GPS coordinates of an
19electronic device, the WiFi signals available to or actually used
20by an electronic device to access the Internet, the
21telecommunication towers or connections available to or actually
22used by an electronic device, the processing of any reported data
23or information through geolocation lookup services, or any
24information derived from any combination of the foregoing.

25(o) “Monitoring technology” means any hardware, software, or
26application utilized in conjunction with an electronic device that
27can cause the electronic device to capture, monitor, record, or
28report information about user activities with or without the user’s
29 knowledge.

30(p) “Remote technical assistance” means collaborative access
31by the user and technician to connect to an electronic device for
32the purpose of providing technical support to the user.

33(q) “Express consent” means the affirmative agreement to any
34use or installation of geophysical location tracking technology or
35remote technical assistance. Express consent does not include
36consent given when either option is highlighted or preselected as
37a default setting.

38

SEC. 2.  

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

39

1812.650.  

(a) A lessor shall provide clear and prominent notice
40to a consumer and obtain express consent from the consumer at
P5    1the time the lessor and the consumer enter into a rental-purchase
2agreement for an electronic device if that device has geophysical
3location tracking technology installed by the lessor, and at any
4time the geophysical location tracking technology is activated or
5used by the lessor.

6(b) For purposes of this section, “clear and prominent notice”
7means notice presented in an understandable language and syntax,
8in the predominantly used language for that communication, and
9that:

10(1) In textual communications, the required disclosures are
11separate and apart from a privacy policy, data use policy, terms of
12service, end-user license agreement, lease agreement, or other
13similar document, and of a type, size, and location sufficiently
14noticeable for an ordinary consumer to read and comprehend in
15print that contrasts highly with the background on which they
16appear.

17(2) In communications disseminated orally or through audible
18means, the required disclosures arebegin insert unavoidable andend insert delivered in
19a volume and cadence sufficient for an ordinary consumer to hear
20and comprehend.

21(3) In communications disseminated through video means, the
22required disclosures are in writing in a form consistent with
23 paragraph (1) and appear on the screen for a duration sufficient
24for an ordinary consumer to read and comprehend thembegin delete, and in
25the same language as the predominantly used language for that
26communicationend delete
.

27(4) In communications made through interactive media,
28including the Internet, online services, and software, the required
29disclosures are unavoidable and presented in a form consistent
30with paragraph (1), in addition to any audio or video presentation.

31(c) A lessor shall not use, sell, or share geophysical location
32tracking technology on an electronic device for any purpose other
33than the repossession of the electronic device when there is a
34violation of the rental-purchase agreement, pursuant to law, or
35when requested by the consumer.

36(d) Clear and prominent notification shall be displayed on an
37electronic device if geophysical location tracking technology is
38activated or used by the lessor. This notification requirement shall
39be suspended if the consumer or lessor reports that the electronic
40device has been stolen and has filed a police report stating that the
P6    1electronic device has been stolen. For purposes of this subdivision,
2“filing a police report” means the filing of a consumer’s or lessor’s
3complaint with the police department in any form recognized by
4that jurisdiction.

5(e) A lessor shall provide that any geophysical location tracking
6technology that has been installed by the lessor on an electronic
7device, or can be activated by the lessor, expires upon the first
8instance the electronic device connects to the Internet after
9completion of the purchase of the electronic device.

10(f) A lessor shall not use or install monitoring technology on
11an electronic device for any purpose other than to provide remote
12technical assistance when requested by the consumer.

13(g) A lessor shall provide clear and prominent notice to a
14consumer and obtain express consent from the consumer for the
15installation or use of any software that allows the lessor to provide
16remote technical assistance and upon the activation and
17deactivation of any remote technical assistance when requested
18by the consumer.

19(h) A lessor shall not acquire any data when providing remote
20technical assistance beyond what is necessary to provide assistance
21to the user and beyond what the user has consented to. Any data
22acquired during the period of consumer consented technical
23assistance shall not be retained, used, or sold for any purpose.

24(i) This section shall not be interpreted to require a lessor to
25enter into a rental-purchase agreement with any consumer who
26does not provide express consent to thebegin delete provisions ofend delete
27 above-described provisions of the rental-purchase agreement.

28

SEC. 3.  

No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution because
30the only costs that may be incurred by a local agency or school
31district will be incurred because this act creates a new crime or
32infraction, eliminates a crime or infraction, or changes the penalty
33for a crime or infraction, within the meaning of Section 17556 of
34the Government Code, or changes the definition of a crime within
35the meaning of Section 6 of Article XIII B of the California
36Constitution.



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