The Vermont Statutes Online

Title 9: Commerce and Trade

Chapter 061: Retail Installment Sales

• § 2401. Definitions

  As used in this chapter:

  (1) “Goods” means all tangible personal chattels when purchased primarily for personal, family, or household use and not for commercial, industrial, or agricultural use, but not including money, motor vehicles, things in action, or intangible personal property other than merchandise certificates or coupons as described in this subdivision. The term includes chattels that are furnished or used at the time of sale or subsequently in the modernization, rehabilitation, repair, alteration, improvement, or construction of real property as to become a part of the real property whether or not it is severable from it. The term also includes merchandise certificates or coupons, issued by a retailer seller, not redeemable in cash, and to be used in their face amount in lieu of cash.

  (2) “Services” means:

  (A) With respect to retail installment contracts, work, labor, and services furnished for personal, family, or household use, and not for commercial, industrial, or agricultural use, in connection with the delivery, installation, servicing, repair, or improvement of goods sold under such contract; and

  (B) With respect to retail charge agreements, work, labor, and services of any kind rented or furnished by a person engaged in the business of retail seller that are for personal, family, or household use and not for commercial, industrial, or agricultural use. The term does not include services for which the cost is by law fixed or approved by, or filed subject to approval or disapproval with, the United States or any state or any agency of either, such as in the case of transportation services.

  (3) “Motor vehicle” or “vehicle” means and is limited to any automobile, mobile home, motorcycle, truck, truck-tractor, trailer, semi-trailer, and bus designed and used primarily to transport persons or property on a public highway, excepting, however, any boat trailer and any vehicle propelled or drawn exclusively by muscular power or that is designed to run only on rails or tracks.

  (4) “Retail buyer” or “buyer” means a person who buys or agrees to buy goods from a retail seller in a retail installment transaction, or who obtains services or agrees to have services furnished or rendered from a retail seller in a retail installment transaction.

  (5) “Retail seller” or “seller” means a person regularly and principally engaged in a business of selling goods to retail buyers.

  (6) “Retail installment transaction” or “transaction” means any transaction in which a retail buyer purchases goods or services for a price consisting of the cash price and other amounts as limited by this chapter and agrees under a retail installment contract or retail charge agreement to pay a part or all of the price in one or more deferred installments. The term shall include every transaction in which the promise or agreement to pay the deferred balance of the price is made by the retail buyer to the retail seller, notwithstanding the existence or occurrence of any one or more of the following events:

  (A) that the retail seller has arranged or arranges to sell, transfer, or assign the retail buyer’s obligation;

  (B) that the amount of the finance charge is determined by reference to charts or information furnished by a financing institution;

  (C) that the forms of instruments used to evidence the retail installment and transaction are furnished by a financing institution; and

  (D) that the credit standing of the retail buyer is or has been evaluated by a financing institution.

  (7) “Retail installment contract” or “contract” means a contract entered into in this State and designated as a retail installment transaction, but not a retail charge agreement, or a document reflecting a sale under it, evidencing an agreement to pay the retail purchase price of goods or any part thereof in two or more installments over a period of time, and pursuant to which title to, or a lien upon, or a security interest in, the goods is retained or taken by the retail seller to secure the payment of a price that includes the charge as limited by section 2405 of this title. The term includes a chattel mortgage, a conditional sales contract, and a contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the value of the goods sold, and it is agreed that the bailee or lessee is bound to become, or, for no further or a merely nominal consideration, has the option of becoming, the owner of the goods upon full compliance with the provisions of the bailment or lease. The term shall also include any amendment of the retail installment contract in which the parties agree to renew, restate, or reschedule the unpaid balance thereof, or to extend the scheduled due date of all or any part of any installment or installments.

  (8) “Retail charge agreement” means an agreement other than a retail installment contract that prescribed the terms of retail installment transactions that may be made thereafter from time to time under it, under which the buyer’s total unpaid balance under the agreement, whenever incurred, is payable in one or more deferred installments and under the terms of which the retail buyer pays a price that includes a charge as limited by section 2406 of this title, which charge is to be computed in relation to the buyer’s unpaid balance from time to time.

  (9) “Cash price” means the minimum price for which the goods and services subject to the retail installment contract or the retail charge agreement, or for which other goods and services of like kind and quality, may be purchased for cash from the seller by the buyer, as stated in the retail installment contract or the retail charge agreement.

  (10) “Recording fees” means the amount of the fees prescribed by law for filing, recording, or otherwise perfecting and, in addition, releasing or satisfying a retained title, lien, or other security interest created by a retail installment transaction.

  (11) “Principal balance” means the cash price of the goods and services that are the subject matter of a retail installment contract plus the amount, if any, included therein, if a separate identified charge is made therefor and stated in the contract, for insurance and official fees, less the amount of the buyer’s down payment in money or goods, or both.

  (12) “Holder” means the retail seller of the goods or services, or the assignee if the retail installment contract or the retail charge agreement or any indebtedness thereunder has been sold or otherwise transferred.

  (13) “Finance charge” means that part of the time sales price as determined under subsection 2405(g) of this title by which the time sales price exceeds the aggregate of the cash price and the amount included in a retail installment contract, if a separate charge is made therefor, for insurance and official fees.

  (14) “Times sales price” means the total of the cash price of the goods or services and the amounts, if any, included for insurance, official fees, and finance charges.

  (15) “Official fees” means the filing or other fees required by law to be paid to a public officer to perfect the interest or lien on the goods retained or taken by a retail seller under a retail installment contract.

  (16) “Sales finance company” means a person engaged in the business of purchasing or otherwise acquiring from one or more sellers retail installment contracts.

  (17) “Commissioner” means the Commissioner of Financial Regulation of Vermont.

  (18) “Person” means an individual, partnership, joint venture, corporation, banking organization, association, or any other group however organized.

  (19) [Repealed.]

  (20) “Commercial lease” means a transfer of the right to possession and use of personal property or fixtures for a term in return for consideration, including leases intended as security, and where the property is to be used by the lessee primarily for commercial, industrial or agricultural use and not for personal, family, or household use. (Added 1963, No. 221, § 1, eff. Jan. 1, 1964; amended 1989, No. 122, § 13, eff. June 30, 1989; 1989, No. 225 (Adj. Sess.), § 25(b); 1993, No. 141 (Adj. Sess.), § 4, eff. May 6, 1994; 1995, No. 180 (Adj. Sess.), § 38(a); 2003, No. 104 (Adj. Sess.), § 4; 2021, No. 20, § 12.)

• §§ 2402, 2403. Repealed. 1995, No. 162 (Adj. Sess.), § 39(c), eff. Jan. 1, 1997.

• § 2404. Investigations and complaints; powers of Commissioner

  (a) The Commissioner, if he or she has reasonable cause to believe that any licensee or other person has violated any of the provisions of this chapter, may make such investigation as he or she shall deem necessary, and, to the extent necessary for this purpose, the Commissioner or his or her authorized representative may examine the licensee or any other person and shall have the power to compel the production of all relevant books, records, and documents.

  (b) Any buyer having reason to believe that this chapter has been violated with respect to this retail installment contract may file with the Commissioner a written complaint setting forth the details of the alleged violation.

  (c) The Commissioner may issue subpoenas to compel the attendance of witnesses and the production of books, records, documents, and other evidence before him or her in any matter over which he or she has jurisdiction, control, or supervision pertaining to this chapter. The Commissioner shall have the power to administer oaths and affirmations to any person whose testimony is required. (Added 1963, No. 221, § 4, eff. Jan. 1, 1964.)

• § 2405. Retail installment contracts

  (a) Each retail installment contract shall be in writing, dated, signed by both the buyer and the seller, and completed as to essential provisions before being signed by the buyer. A retail installment contract need not be contained in a single document.

  (b) The printed portion of the retail installment contract, other than instructions for completion, shall be in a size equal to at least eight-point type. The contract shall be designated in a size equal to at least 10-point bold type as a “Retail Installment Contract” and shall contain the following notice in a size equal to at least 10-point bold type.

  “NOTICE TO THE BUYER—DO NOT SIGN THIS
  CONTRACT IN BLANK. YOU ARE ENTITLED TO A
  COPY OF THE CONTRACT AT THE TIME YOU
  SIGN. KEEP IT TO PROTECT YOUR LEGAL
  RIGHTS.”

  (c) A retail installment contract may be evidenced by an original document stated to be applicable to purchase of goods or services to be made by the retail buyer from time to time. In that case, the original document, together with the sales slip, account book, or other written statement relating to each purchase, shall set forth all of the information required by this section and shall constitute the retail installment contract for each purchase. On each succeeding purchase under the original document, the sales slip, account book, or other written statement may, at the option of the seller, constitute the memorandum required by subsection (h) of this section. The seller shall deliver to the buyer a copy of the contract as accepted by the seller.

  (d) The seller shall deliver to the buyer at the time of the execution of the contract a copy of the contract as accepted by the seller, except that where the sale is less than $ 5.00, the seller may mail a copy of such contract to the buyer at his or her address as shown on the retail installment contract. Any acknowledgement by the buyer of delivery of a copy of the contract shall be in a size equal to at least 10-point bold type and shall appear directly above the buyer’s signature. In any transaction involving the modernization, rehabilitation, repair, alteration, improvement, or construction of real property, the seller shall not request or accept a certificate of completion signed by the buyer before the actual delivery of the goods and completion of the work to be performed under the contract.

  (e) Retail installment contracts negotiated and entered into by mail without personal solicitation by salespersons or other representatives of the seller and based upon a catalogue of the seller or other printed solicitation of the business, if the catalogue or other printed solicitation clearly sets forth the cash price and other terms of sales to be made through the medium, may be made as provided in this section. All provisions of this chapter applicable to retail installment contracts shall apply to those sales, except that the retail installment contract when completed by the buyer need not contain the items required in subsection (g) of this section. When the contract is received from the retail buyer, the seller shall forthwith prepare a written memorandum containing all the information required by subsection (g) of this section to be included in a retail installment contract. In lieu of delivering a copy of the contract to the buyer as provided in subsection (d) of this section, the seller shall deliver to the buyer a copy of such memorandum prior to the due date of the first installment under the contract.

  (f) The retail installment contract shall contain the names of the seller and the buyer, the place of business of the seller, the residence or other address of the buyer as specified by the buyer, and a description of the goods sold or to be sold, which shall be sufficient for identification, and of the services furnished or to be furnished.

  (g)(1) The retail installment contract shall contain the following items:

  (A) the cash price of the goods or services;

  (B) the amount of the buyer’s down payment, if any, specifying the amount paid in money and in goods traded in;

  (C) the difference between subdivisions (A) and (B) of this subsection (g);

  (D) the amount, if any, included for insurance, if a separate identified charge is made therefor, specifying the coverage and cost of each type of insurance at rates authorized by rate schedules then in effect and on file with the Commissioner of Financial Regulation; the cost, if any, for service contracts as defined in 8 V.S.A. § 4247; and the reasonable cost, if any, for a debt protection agreement as set forth in 8 V.S.A. § 10405;

  (E) the amount of all official fees and a separate identified charge shall be shown therefor;

  (F) the principal balance, which is the sum of subdivisions (C) and (D) and (E) of this subsection;

  (G) the amount of the estimated finance charge as limited by subsection (k) of this section;

  (H) the sum of subdivisions (F) and (G) of this subsection (g), which is the balance to be paid by the buyer to the seller; the number of installments thereof, the amount of each installment, and the due date or period thereof; and notice to the borrower as to the effect of early or late payments; and

  (I) the total time price, which is the sum of subdivisions (A), (D), (E), and (G) of this subdivision (1).

  (2) The items specified in subdivision (1) of this subsection need not be stated in the sequence or order set forth; additional items may be included, but only to explain the calculations involved in determining the balance to be paid by the buyer as set forth. No other charges shall be made by the seller.

  (h)(1) Whenever a retail installment contract by its terms permits inclusion of additional goods purchased after the original agreement, and such goods are so purchased and the amount due on the new purchase is combined with an unpaid balance on any prior purchase so as to permit the retail seller to retain title to or reserve a lien upon all goods under the combined agreement, the retail seller shall, at the time of the additional purchase, deliver to the retail buyer and attach to the original agreement:

  (A) a statement containing all the information with respect to the additional purchase required to be included in a retail installment contract; and

  (B) a statement showing the amount due on the agreement immediately previous to the new purchase, the amount due after the purchase, the payments agreed to be made thereafter, and the number of additional months required to complete the payments.

  (2) Whenever a payment is made on such a continuing agreement after additional purchases have been added, the payment shall be considered as allocated among each of the separate purchases included, in the same proportions that the original cash price of each bears to the total cash price of all goods to which the retail seller has retained title, and the retail seller before repossessing or attempting to repossess any goods under any such agreement shall actually allocate in such manner all such payments made to him or her by the retail buyer. When the amount owing on any such purchase has been fully paid, the goods so paid for shall become the absolute property of the retail buyer and shall not be subject to possession for any subsequent default on the agreement. The retail buyer under any such agreement may at any time prepay the amount due on any of the separate purchases and in case of repossession may redeem any of such separate purchases by payment of the amount due on such purchase alone.

  (i)(1) The amount, if any, stated and included in the retail installment contract for insurance to be purchased by the holder shall not exceed the applicable premiums chargeable in accordance with filings, if any, with the Department of Financial Regulation. If the insurance for which the stated amount is included insures the life, safety, or health of the buyer, or his or her interest in or his or her liability because of the goods or services and is purchased by the holder, the holder shall, within 30 days after execution of the retail installment contract, send or cause to be sent to the buyer a policy or policies of insurance, written by an insurance company authorized to do business in this State, or a certificate or certificates thereof. The policy or policies shall set forth all the terms, exceptions, limitations, restrictions, and conditions of the contract or contracts of insurance and the certificates shall set forth a summary thereof. The insurance may be purchased by the holder. The buyer shall have the privilege of purchasing the insurance from an agent or broker of his or her own selection and of selecting an insurance company acceptable to the holder, which acceptance shall not be arbitrarily or unreasonably withheld, but in that case the inclusion of the insurance premium in the retail installment contract shall be optional with the seller.

  (2) If the insurance is cancelled, or the premium adjusted, any refund of the premium received by the holder shall be credited to the outstanding principal balance of the contract, except to the extent applied towards payment for similar insurance protecting the interest of the buyer and the holder or either of them.

  (j) A retail installment contract shall not be signed by any party thereto when it contains blank spaces of items that are pertinent to the transaction and should be completed. However, if delivery of the goods is not made at the time of the execution of the contract, the identifying numbers or marks of the goods or similar information and the due date of the first installment may be inserted in the contract after its execution.

  (k) The interest rates for retail installment sales shall be that authorized by subdivision 41a(b)(2) of this title, and the method of interest calculation shall be as specified in subsection 41a(d) of this title.

  (l) [Repealed.]

  (m) The holder of any retail installment contract may collect a reasonable delinquency charge if provided for in the contract. In addition, where collection is referred for payment to an attorney who is not a salaried employee of the holder of the contract, the contract may provide for the payment of reasonable attorney’s fees and for court costs and disbursements and also for actual and reasonable out-of-pocket expenses incurred after referral in connection with the delinquency, repossession, or foreclosure, including storage charges, reconditioning expenses, and collection expenses.

  (n) Upon written request of the buyer, the holder of a retail installment contract shall give or forward to the buyer a written statement of the dates and amounts of installment payments and the total amount unpaid under the contract. The buyer shall be given a written receipt for any payment when made in cash. One statement or receipt shall be given the buyer without charge, and if any additional statement or receipt is requested by the buyer, it shall be supplied by the holder at a charge not in excess of $1.00 for each additional statement or receipt so supplied.

  (o) A provision in a retail installment contract relieving the seller from liability for any legal remedies that the buyer may have against the seller shall not be enforceable.

  (p)(1) Notwithstanding the provisions of any retail installment contract to the contrary, any buyer may prepay the contract in full at any time before maturity without penalty.

  (2) [Repealed.]

  (q)(1) The holder of a retail installment contract upon request by the buyer may agree to an amendment thereto to extend the scheduled due date of all or any part of any installment or installments or to renew, restate, or reschedule the unpaid balance of the contract.

  (2) The amendment to the contract must be confirmed in a writing signed by the buyer and the holder. The writing shall set forth the terms of the amendment and shall either be delivered to the buyer or mailed to him or her at the address as shown on the contract. That writing together with the original contract and any previous amendments thereto shall constitute the retail installment contract. (Added 1963, No. 221, § 5, eff. Jan. 1, 1964; amended 1967, No. 58, § 2; 1979, No. 173 (Adj. Sess.), §§ 16, 17, eff. April 30, 1980; 1985, No. 59, § 2; 1989, No. 122, §§ 14-21, eff. June 30, 1989; 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38(a); 1997, No. 109 (Adj. Sess.), § 5, eff. Sept. 1, 1998; 2005, No. 70, § 6; 2013, No. 29, § 9, eff. May 13, 2013; 2021, No. 20, §§ 13, 14.)

• § 2406. Retail charge agreements

  (a) Each retail charge agreement shall be in writing and signed by the buyer. A copy of any agreement executed on or after January 1, 1964 shall be delivered or mailed to the buyer by the seller before the date on which the first payment is due under the agreement. Any acknowledgment by the buyer of delivery of a copy of the agreement contained in the body thereof shall be in a size equal to at least 10-point boldface type and shall appear directly above the buyer’s signature. No agreement executed on or after January 1, 1964 shall be signed by the buyer when it contains blank spaces to be filled in after it has been signed. The buyer’s acknowledgment, conforming to the requirements of this subsection, of delivery of a copy of an agreement shall be presumptive proof in any action or proceeding of the delivery and that the agreement, when signed, did not contain any blank spaces. All retail charge agreements executed on or after January 1, 1964 shall state the maximum amount or rate of any charge referred to in subsection (c) of this section to be charged and paid under the agreement. Any such agreement shall contain the following notice printed or typed in a size equal to at least 10-point bold type, which shall appear directly above the space provided for the buyer’s signature:

  “NOTICE TO THE BUYER—DO NOT SIGN THIS AGREEMENT IN BLANK. YOU ARE ENTITLED TO A COPY OF THE AGREEMENT AT THE TIME YOU SIGN. KEEP IT TO PROTECT YOUR LEGAL RIGHTS.”

  (b)(1) The seller shall promptly supply the buyer under the retail charge agreement with a statement as of the end of each monthly period, which need not be a calendar month, or other regular period agreed upon in writing by the seller and buyer, in which there is any unpaid balance under the agreement, which statement shall recite the following:

  (A) the unpaid balance under the retail charge agreement at the beginning and at the end of the period;

  (B) unless otherwise furnished by the seller to the buyer by sales slip, memorandum, or otherwise, a description of the goods or services purchased during the period, the cash price, and the date of each purchase;

  (C) the payments made by the buyer to the seller and other credits to the buyer during the period;

  (D) the amount, if any, of any charge for the period made under subsection (c) of this section; and

  (E) that the buyer may at any time pay the total balance or any part of the total balance.

  (2) The items specified in subdivision (1) of this subsection need not be stated in the sequence or order set forth in subdivision (1) of this subsection; additional items may be included, but only to explain the computations made in determining the amount to be paid by the buyer.

  (c) A retail charge agreement may provide for, and the seller or holder may then, notwithstanding the provisions of any other law, charge, collect, and receive, in addition to the cash price, a charge for the privilege of making deferred payments under the agreement, which charge shall not exceed the rates authorized by subdivision 41a(b)(9) of this title. If the amount of the finance charge otherwise permitted shall be less than 50 cents for any month or longer regular period, 50 cents may nevertheless be charged, received, and collected. In addition, a retail charge agreement may provide for the payment of reasonable attorney’s fees where it is referred for collection to an attorney who is not a salaried employee of the holder of the retail charge agreement or any indebtedness under the agreement and of court costs and disbursements and also of actual and reasonable out-of-pocket expenses incurred in connection with the collection. (Added 1963, No. 221, § 6, eff. Jan. 1, 1964; amended 1979, No. 173 (Adj. Sess.), § 18, eff. April 30, 1980; 1983, No. 214 (Adj. Sess.), § 3; 2021, No. 20, § 15.)

• § 2406a. Repealed. 1969, No. 118, eff. April 22, 1969.

• § 2407. Scope

  (a) This chapter shall not affect or apply to any loans or to the business of making loans under or in accordance with the laws of this State, nor shall any of the provisions of the loan or interest statutes of this State affect or apply to any retail installment transaction regulated hereunder. Nothing in this chapter shall be construed to impair or in any way affect any rule of law applicable to or governing retail installment sales not otherwise subject hereto. This chapter shall apply exclusively to all retail installment transactions as defined in section 2401 of this title.

  (b) This chapter shall not apply to commercial leases. (Added 1963, No. 221, § 7, eff. Jan. 1, 1964; amended 1989, No. 122, § 22, eff. June 30, 1989; 1989, No. 284 (Adj. Sess.), § 3.)

• § 2408. Waiver

  No act or agreement of the retail buyer before or at the time of the making of the retail installment contract, retail charge agreement, or purchase thereunder shall constitute a valid waiver of any of the provisions of this chapter. (Added 1963, No. 221, § 8, eff. Jan. 1, 1964.)

• § 2409. Penalties

  (a) In case of failure of any person to comply with any of the provisions of this chapter, such person or any person who acquires a contract or installment account with knowledge of such noncompliance is barred from recovery of any finance charge or of any delinquency, collection, deferral, or refinance charge imposed in connection with such contract or installment account, and the buyer shall have the right to recover from such person an amount equal to any of such charges paid by the buyer with interest thereon from the time of payment and all expenses of collection, including reasonable attorney’s fees, in a civil action on this statute.

  (b) In any case in which a person willfully violates any provision of this chapter, except as provided in subsection (c) of this section, the buyer may recover from such person an amount equal to two times the total of the finance charges and any delinquency, collection, extension, deferral, or refinance charges imposed, contracted for, or received, and the seller shall be barred from the recovery of any such charges. The buyer shall also recover reasonable attorney’s fees as determined by the court.

  (c) A person shall not knowingly or willfully make any retail installment contract under this chapter that directly or indirectly calls for the payment of any finance charges in excess of the legal rate as set forth in this chapter. A contract violating this section shall be unenforceable, and a person shall have no right to collect any principal, finance, or other charges.

  (d) Notwithstanding the provisions of this section, any failure to comply with any provision of the chapter may be corrected by the holder in accordance with the provisions of this section, provided that a willful violation may not be corrected, and a correction that will increase the amount owed by the owner or the amount of any payment shall not be effective unless the buyer concurs in writing to the correction. If a violation is corrected by the holder in accordance with the provisions of this section, neither the seller nor the holder shall be subject to any penalty under this section. The correction shall be made by delivering to the buyer a corrected copy of the contract within 60 days of the execution of the original contract by the buyer. Any amount improperly collected from the buyer shall be credited against the indebtedness evidenced by the contract.

  (e) Any person who shall willfully and intentionally violate any provisions of this chapter shall be fined not more than $100.00 for the first offense. Upon conviction for violating this section in any transaction entered into or consummated after a first conviction hereunder, the offender shall be fined not more than $1,000.00 or imprisoned for not more than one year, or both. (Added 1963, No. 221, § 9, eff. Jan. 1, 1964; amended 1973, No. 185 (Adj. Sess.), § 2.)

• § 2410. Prohibition on discrimination based on sex, sexual orientation, gender identity, marital status, race, color, religion, national origin, age, or disability

  No seller shall discriminate against any buyer or prospective buyer who desires to establish a retail installment contract or retail charge agreement because of the sex, sexual orientation, gender identity, marital status, race, color, religion, national origin, age, or disability of the buyer. (Added 1973, No. 130 (Adj. Sess.), § 2; amended 1989, No. 122, § 23, eff. June 30, 1989; 1991, No. 135 (Adj. Sess.), § 9; 2007, No. 41, § 12; 2013, No. 96 (Adj. Sess.), § 29.)