Amended in Assembly March 26, 2015

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 begin delete unless specified requirements are met, and end delete begin insert unless the dealer provides written disclosure to the buyer at the time the vehicle is purchased that the vehicle is equipped with starter interrupt technology and that disclosure informs the buyer 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, as specified. Existing law end insert makes a violation of this prohibition a misdemeanor.

begin delete

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 and communications 30 days before the dealer disables the 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. By expanding the scope of a crime, this bill would impose a state-mandated local program.

end delete begin insert

This bill would instead require the written disclosure provided to the buyer at the time of sale to inform the buyer that a warning will be provided 10 days before the use of the starter interrupt technology and a final warning will be provided no less than 48 hours before the use of the starter interrupt technology to shut down the vehicle remotely, as specified. By expanding the scope of a crime, the bill would impose a state-mandated local program.

end insert

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:

begin delete

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 subparagraph (A), (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, email, 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 does both of the following:

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

(I) That the loan is past due.

(II) The amount currently due on the loan.

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

(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.

(V) 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.

(VI) That, if the amount due 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.

(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:

(I) That the loan is past due.

(II) The amount currently due on the loan.

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

(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.

(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.

(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.

(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.

(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.

(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.

(E)  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).

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 2983.37 of the end insert begin insert Civil Code end insert begin insert is amended to
read: end insert

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 any
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 provisions:

(A) Notifies the buyer in writing at the time of the sale that the
vehicle is equipped with starter interrupt technology, which the
buy-here-pay-here dealer can use to shut down the vehicle
remotely.

(B) The written disclosure provided to the buyer at the time of
sale informs the buyer that a warning will be provided begin insert 10 days
before the use of the starter interrupt technology, and a final
warning will be provided end insert no less than 48 hours before the use of
the starter interrupt technology to shut down the vehicle remotely
and discloses the manner and method in which that warning will
occur. The dealer shall offer the buyer a choice of warning
methods, including warning from the device, telephone call, email,
or text message, if available, provided that the warning method
does not violate applicable state or federal law.

(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)  begin delete A end delete begin insert Each end insert 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.