California Legislature—2015–16 Regular Session

Assembly Bill No. 265

Introduced by Assembly Member Holden

February 10, 2015

An act to amend Section 2983.37 of the Civil Code, relating to consumer protection.

LEGISLATIVE COUNSEL’S DIGEST

AB 265, as introduced, Holden. Consumer protection: buy-here-pay-here dealers.

Existing law requires buy-here-pay-here dealers, as defined, to provide buyers with specific warranties, disclosures, and services. Existing law prohibits a buy-here-pay-here dealer from locating a vehicle with electronic tracking technology or disabling a vehicle with starter interrupt technology unless specified requirements are met, and makes a violation of this prohibition a misdemeanor.

This bill would prohibit a buy-here-pay-here dealer from disabling a vehicle with starter interrupt technology unless the dealer also provides the buyer with specific written disclosures 30 days before the dealer disables the vehicle. By expanding the scope of 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 2983.37 of the Civil Code is amended
to read:

2983.37.  

(a) After a sale of a vehicle under this chapter, a
buy-here-pay-here dealer, as defined in Section 241 of the Vehicle
Code, shall not do any of the following:

(1)  Utilize electronic tracking technology to obtain or record
the location of the vehicle, unless the buyer is expressly made
aware of the existence and use of the tracking technology by the
buy-here-pay-here dealer, the buyer’s written consent is obtained,
and either subparagraph (A) or (B), or both, apply:

(A) The electronic tracking technology is used solely to verify
and maintain the operational status of the tracking technology, to
repossess the vehicle, or to locate the vehicle to service the loan
or keep the loan current.

(B) The electronic tracking technology is used solely for begin delete any end delete
begin insert an end insert optional service to the buyer and both of the following
conditions are met:

(i) The agreement to utilize electronic tracking technology for
the optional service is separate from the purchase and sale
agreement, is not a condition of the purchase or sale agreement
for the vehicle, and is executed after the completion of the purchase
or sale agreement for the vehicle.

(ii) The buyer is permitted to cancel the optional service at any
point in the future without affecting the sale of the vehicle, and is
informed of his or her ability to do so.

(2) Disable the vehicle by using starter interrupt technology,
unless the buy-here-pay-here dealer complies with all of the
begin delete following provisions: end delete begin insert following: end insert

begin delete

(A) Notifies the buyer in writing at the time of the sale that

end delete begin insert

(A) At the time of the sale, the buy-here-pay-here dealer provides
the buyer written notice of both of the following:

end insert

begin insert (i) end insert begin insert   end insert begin insert That end insert the vehicle is equipped with starter interrupt begin delete technology,
which end delete begin insert technology that end insert the buy-here-pay-here dealer can use to
shut down the vehicle remotely.

begin delete

(B) The written disclosure provided to the buyer at the time of
sale informs the buyer that

end delete

begin insert (ii) end insert begin insert   end insert begin insert That end insert a warning will be provided no less than 48 hours before
the use of the starter interrupt technology to shut down the vehicle
remotely and begin delete discloses end delete the manner and method in which that
warning will occur. The begin insert buy-here-pay-here end insert dealer shall offer the
buyer a choice of warning methods, including warning from the
device, telephone call, e-mail, or text message, if available,
provided that the warning method does not violate applicable state
or federal law.

begin insert

(B) At least 30 days prior to disabling the vehicle for the buyer’s
failure to tender timely loan repayments, the buy-here-pay-here
dealer provides the buyer written notice of all of the following:

end insert begin insert

(i) That the loan is past due.

end insert begin insert

(ii) That the buy-here-pay-here dealer may use starter interrupt
technology to disable the vehicle within 30 days of the mailing
date of the notice.

end insert begin insert

(iii) The amount currently due on the loan.

end insert begin insert

(iv) The acceptable forms of payment of the amount currently
due.

end insert begin insert

(v) That the vehicle will not be disabled if the buyer tenders the
amount currently due on the loan to the buy-here-pay-here dealer
in an acceptable form of payment within 30 days of the mailing
date of the notice.

end insert begin insert

(vi) That, if the loan is not paid, a warning will be provided
using the warning method specified at the time of sale to the buyer
no less than 48 hours before the use of the starter interrupt
technology to shut down the vehicle remotely.

end insert

(C)  In the event of an emergency, the buyer will be provided
with the ability to start a dealer-disabled vehicle for no less than
24 hours after the vehicle’s initial disablement.

(b) A buy-here-pay-here dealer shall not require the buyer to
make payments to the seller in person. For purposes of this
subdivision, “payments” does not include the downpayment. If
the buyer tenders timely payment of a deferred downpayment, the
dealer shall not repossess the vehicle or impose any other charge
or penalty on the grounds that the payment was not made in person.

(c) A violation of this section is a misdemeanor punishable by
a fine not exceeding one thousand dollars ($1,000).

SEC. 2.  

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.