Amended in Assembly March 9, 2015

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 amended, 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 begin insert and communications end insert 30 days before the dealer disables the begin delete vehicle. end delete begin insert vehicle, as specified. The bill would also require a buy-here-pay-here dealer, if that dealer negotiated a contract pursuant to these provisions in specified languages, to deliver those written disclosures in the language in which the contract was negotiated. end insert 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 begin delete either end delete subparagraph begin delete (A) or end delete begin insert (A), end insert (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 an
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
following:

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

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

(ii) That 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 the manner and method in which that warning will
occur. The buy-here-pay-here dealer shall offer the buyer a choice
of warning methods, including warning from the device, telephone
call, begin delete e-mail, end delete begin insert email, end insert or text message, if available, provided that the
warning method does not violate applicable state or federal law.

(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 begin delete provides the buyer written notice of all end delete begin insert does both end insert of the
following:

begin insert

(i) Provides the buyer written notice of all of the following:

end insert begin delete

(i)

end delete

begin insert (I) end insert  That the loan is past due.

begin delete

(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 delete begin delete

(iii) The amount currently due on the loan.

end delete begin insert

(II) The amount currently due on the loan.

end insert begin delete

(iv)

end delete

begin insert (III) end insert  The acceptable forms of payment of the amount currently
begin delete due. end delete begin insert due, so long as that form of payment is not prohibited by
subdivision (b). end insert

begin insert

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

end insert begin delete

(v)

end delete

begin insert (V) end insert  That the vehicle will not be disabled if the buyer tenders
the amount begin delete currently due on the loan to the buy-here-pay-here
dealer in an end delete begin insert specified in subclause (II) to the dealer using an end insert
acceptable form of payment within 30 days of the mailing date of
the notice.

begin delete

(vi)

end delete

begin insert (VI) end insert  That, if the begin delete loan end delete begin insert amount due end insert 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.

begin insert

(ii) Communicate, within 48 hours of mailing the notice required
by clause (i), to the buyer that the notice has been sent. The
buy-here-pay-here dealer shall offer the buyer at the time of sale
a choice of communication methods, including, a telephone call,
email, or text message, if available, provided that the warning
method does not violate applicable state or federal law. The
communication required by this clause shall provide the buyer
with notice of the following:

end insert begin insert

(I) That the loan is past due.

end insert begin insert

(II) The amount currently due on the loan.

end insert begin insert

(III) The acceptable forms of payment of the amount currently
due, so long as that form of payment is not prohibited by
subdivision (b).

end insert begin insert

(IV) That written notice of the past due loan has been mailed
to the buyers last known address and provide the mailing date of
the notice.

end insert begin insert

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

end insert begin insert

(VI) That the vehicle will not be disabled if the buyer tenders
the amount specified in subclause (II) to the dealer using an
acceptable form of payment within 30 days of the mailing date of
the notice.

end insert begin insert

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

end insert begin insert

(C) A buy-here-pay-here dealer shall keep a physical copy of
all notices sent pursuant to clause (i) of subparagraph (B) for at
least one year following the mailing date of that notice.

end insert begin insert

(D) Any buy-here-pay-here dealer who negotiated any contract
pursuant to this chapter primarily in Spanish, Chinese, Tagalog,
Vietnamese, or Korean, orally or in writing, shall deliver the notice
required by subparagraph (B) to the other party to the contract
in the language in which the contract was negotiated.

end insert begin delete

(C)

end delete

begin insert (E) end insert  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.