12 Pa.C.S. Ch. 63

in effect

12 Pa.C.S. § 6301 Scope of chapter.

This chapter relates to goods and services installment sales.

12 Pa.C.S. § 6302 Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Actuarial method." The method of allocating payments made on a debt between the amount financed and the finance charge at the interest rate stated in the closed-end credit agreement, as defined in Regulation Z, adopted under the Truth in Lending Act (Public Law 90-321, 15 U.S.C. § 1601 et seq.). "Buyer." A person who buys goods or obtains services from a seller in a sale, if the acquisition is not principally for the purpose of resale. "Closed-end credit agreement." Either of the following: (1) A contract for a sale between a buyer and seller in which the buyer promises to pay in installments the outstanding balance incurred in the sale, whether or not the contract contains a security interest, and which contains either of the following: (i) A finance charge, which is computed and added to the unpaid balance. (ii) A provision specifying that, if the buyer had not contracted to pay in installments, the buyer could have received the goods or services at a lesser price or additional or higher quality goods or services at no added cost. (2) A contract for a sale between a buyer and seller that includes a security agreement or a contract for the bailment or leasing of goods in which both of the following occur: (i) The consideration that the bailee or lessee contracts to pay as compensation for the use of the goods is a sum substantially equivalent to or in excess of their value and is an obligation for the term of the lease that is not subject to termination by the bailee or lessee. (ii) The bailee or lessee agrees to become or has the option of becoming the owner of the goods for no or nominal additional consideration upon full compliance with the terms of the contract. "Finance charge." (1) The amount, regardless of how expressed, that a buyer contracts to pay or pays for the privilege of purchasing goods or services to be paid in installments. (2) Includes all charges incident to investigating and making a closed-end credit agreement or an open-end credit agreement and for the extension of the credit under that agreement. (3) Excludes the following: (i) Amounts charged for insurance premiums under section 6342 (relating to insurance). (ii) Late fees under section 6343 (relating to late fees). (iii) The costs of collection under section 6344 (relating to costs of collection). (iv) Costs from nonaffiliated entities under section 6346 (relating to costs from nonaffiliated entity). (v) Extension and deferment charges under section 6347 (relating to extension and deferment). (vi) Attorney fees. (vii) Court costs. (viii) Official fees. "Financing agency." A person, including a financial institution, engaged in this Commonwealth in whole or in part in the business of purchasing closed-end credit agreements or open-end credit agreements from at least one seller. "Goods." (1) Personal property bought primarily for personal, family or household use. (2) The term includes the following: (i) Certificates, coupons or gift cards exchangeable for goods. (ii) Electronic media items. (iii) Items purchased through the Internet. (3) The term excludes the following: (i) Goods covered under the act of August 14, 1963 (P.L.1082, No.464), known as the Home Improvement Finance Act. (ii) A motor vehicle covered under Chapter 62 (relating to motor vehicle sales finance). (iii) A security covered under the act of December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania Securities Act of 1972. "Holder." (1) Either of the following: (i) A seller who acquires a closed-end credit agreement or an open-end credit agreement that is executed, incurred or entered into by a buyer. (ii) A financing agency or other assignee that purchases the agreement under subparagraph (i). (2) Excludes a pledgee or holder of a security interest in an aggregate number of agreements to secure a bona fide loan on them. "Official fees." The fees required by law and actually to be paid to the appropriate public officer to perfect a lien or other security interest that is retained or taken by a seller under a closed-end credit agreement or an open-end credit agreement. "Open-end credit agreement." A contract: (1) in which a buyer promises to pay in installments to a seller or financing agency the outstanding balance incurred in a sale, whether or not the seller retains a security interest in the goods sold; and (2) that provides for a finance charge expressed as a percent of the periodic balances to accrue thereafter, if the charge is not capitalized or stated as a dollar amount in the contract. "Purchase price." The price of goods sold or services furnished, which may include applicable taxes, as specified in a closed-end credit agreement or an open-end credit agreement. "Sale." The sale of goods or furnishing of services by a seller to a buyer for a time sale price payable in installments. "Seller." A person engaged in the business of selling goods or furnishing services to a buyer. "Service contract." A written contract, optional on the part of a buyer, to perform over a fixed period of time or for a specified duration services regarding the maintenance or repair of goods. "Services." (1) Work, labor and services for other than a commercial or business use. (2) The term includes the following: (i) Services furnished in connection with the purchase or repair of goods or the repair of motor vehicles. (ii) A service contract. (iii) Services purchased through the Internet. (3) The term excludes the following: (i) Services covered under the act of August 14, 1963 (P.L.1082, No.464), known as the Home Improvement Finance Act. (ii) A service contract or warranty covered under Chapter 62 (relating to motor vehicle sales finance). (iii) Services for which the tariffs, rates, charges, costs or expenses, including in each instance the time sale price, are required by law to be filed with or approved by any of the following: (A) The Commonwealth. (B) The Federal Government. (C) An official department, commission or agency of the Commonwealth or the United States. "Time balance." The total of the unpaid balance and the amount of the finance charge. "Time sale price." The total of the purchase price and the amounts included for insurance, official fees and finance charge. "Unpaid balance." The purchase price and the amounts included for insurance and official fees, less the amount of a buyer's down payment in money or goods. "Warranty." (1) Either of the following, which becomes part of the basis of the bargain between a buyer and seller for purposes other than resale: (i) A written affirmation of fact or written promise made in connection with the sale of goods by a seller or manufacturer to a buyer that relates to the nature of the material or workmanship and affirms or promises that the material or workmanship is free of defects or will meet a specified level of performance over a specified period of time. (ii) Any undertaking in writing in connection with the sale of goods by a seller or manufacturer to refund, repair, replace or take other remedial action with respect to the goods if the goods fail to meet the specifications set forth in the undertaking. (2) Excludes a service contract and an extended warranty with the characteristics of a service contract. Cross References. Section 6302 is referred to in section 6902 of Title 42 (Judiciary and Judicial Procedure).

12 Pa.C.S. § 6303 Waiver.

A buyer's waiver of the provisions of this chapter, including any purported waiver effected by a contractual choice of the law of another jurisdiction contained in a closed-end credit agreement or an open-end credit agreement, shall be deemed contrary to public policy and is void and unenforceable.

12 Pa.C.S. § 6304 Applicability.

(a) Agreements.--A closed-end credit agreement and an open-end credit agreement are deemed to be made in this Commonwealth and subject to the provisions of this chapter if either of the following occurs: (1) The seller offers or agrees in this Commonwealth to sell to a resident buyer of this Commonwealth. (2) A resident buyer of this Commonwealth accepts or makes the offer in this Commonwealth to buy, regardless of the situs specified in the agreement. (b) Offer to sell.--A verbal or written solicitation or communication to sell that originates outside this Commonwealth and is forwarded to and received in this Commonwealth by a resident buyer of this Commonwealth shall be deemed an offer or agreement to sell in this Commonwealth and subject to the provisions of this chapter. (c) Offer to buy.--A verbal or written solicitation or communication to buy that originates within this Commonwealth from a resident buyer of this Commonwealth and is forwarded to and received by a seller outside this Commonwealth shall be deemed an acceptance or offer to buy in this Commonwealth and subject to the provisions of this chapter. (d) Subsequent goods and services.--Goods or services that subsequently result from a solicitation or communication under subsection (b) or (c) are subject to the provisions of this chapter. (e) Exclusivity.--Notwithstanding any provision of law to the contrary, this chapter shall exclusively govern and regulate the terms and conditions of all extensions of credit, except cash advances, for the purchase of goods and services within this Commonwealth.

12 Pa.C.S. § 6305 Prohibited activities and provisions.

(a) Activities.--In attempting to collect a buyer's obligation, a seller or holder shall comply with the act of March 28, 2000 (P.L.23, No.7), known as the Fair Credit Extension Uniformity Act. (b) Provisions.--A closed-end credit agreement, an open-end credit agreement or other agreement may not contain a provision by which any of the following may occur: (1) Except as provided in section 6306 (relating to assignment), the buyer agrees not to assert a claim or defense arising from the sale against a seller or an assignee. (2) In the absence of the buyer's default in the performance of an obligation, the holder may accelerate the maturity of all or part of the amount owed. (3) The seller or holder of the agreement, or a person acting on behalf of the seller or holder, is given authority to enter the buyer's premises unlawfully or commit a breach of the peace in the repossession of goods. (4) The buyer waives a right of action against the seller or holder of the agreement, or a person acting on behalf of the seller or holder, for an illegal act committed in the collection of payments under the agreement or the repossession of goods. (5) The buyer executes a power of attorney appointing the seller or holder of the agreement, or a person acting on behalf of the seller or holder, as the buyer's agent in the collection of payments under the agreement or the repossession of goods. (6) The buyer relieves the seller from liability for legal remedies that the buyer may have against the seller under the agreement or a separate instrument executed in connection with the agreement. (7) The buyer agrees to the payment of a charge by reason of the exercise of the right to rescind or avoid the agreement. (8) The seller or holder of the agreement is given the right to commence an action on the agreement under the provisions of this chapter in a county other than the county where any of the following occurred: (i) The buyer signed the agreement. (ii) The buyer resides at the commencement of the action. (iii) The buyer resided when the agreement was entered into. (iv) The goods purchased under the agreement have been so affixed to real property as to become a part of the real property. (9) An assignment of wages is given. (10) The seller or holder of the agreement, or a person acting on behalf of the seller or holder, is given authority to execute upon a judgment by confession. (11) The seller or holder of the agreement, or a person acting on behalf of the seller or holder, is given authority to take a mortgage or other security against residential real estate of the buyer or another obligee to the agreement.

12 Pa.C.S. § 6306 Assignment.

Except as provided in section 6352 (relating to noncompliance; costs and charges), a right of action or defense arising from a sale that a buyer has against a seller is not eliminated by assignment of the buyer's closed-end credit agreement or open-end credit agreement to a third party, regardless of whether the third party acquires the agreement in good faith and for value. Cross References. Section 6306 is referred to in section 6305 of this title.

12 Pa.C.S. § 6307 Venue.

An action on a closed-end credit agreement or an open-end credit agreement shall be commenced in a county where any of the following occurred: (1) The buyer signed the agreement. (2) The buyer resides at the commencement of the action. (3) The buyer resided when the agreement was entered into. (4) The goods purchased under the agreement have been so affixed to real property as to become a part of the real property.

12 Pa.C.S. § 6308 Attorney fees and costs.

(a) Award.--Reasonable attorney fees and costs shall be awarded to the prevailing party in an action on a closed-end credit agreement or an open-end credit agreement, regardless of whether the action is instituted by the seller, holder or buyer. (b) Agreement.--A seller may provide for the payment of attorney fees and costs under subsection (a) in an agreement signed by the buyer, if a copy of the agreement is given or furnished to the buyer. (c) Definition.--For purposes of this section, a defendant is deemed to be a prevailing party if both of the following occur: (1) The defendant: (i) Alleges in its answer that it tendered to the plaintiff the full amount to which the plaintiff was entitled. (ii) Deposits the amount with the court. (2) The allegation in paragraph (1)(i) is found to be true.

12 Pa.C.S. § 6309 Repossession; acceleration; right to cure.

(a) Rights of holder.--If a buyer defaults in the performance of an obligation under a closed-end credit agreement or an open-end credit agreement, the holder, pursuant to the rights granted under the agreement: (1) May proceed to recover judgment for the balance due or retake the goods. (2) Shall comply with and be limited by the requirements of 13 Pa.C.S. (relating to commercial code). (b) Prohibited actions.--Unless the buyer is in default and the seller or holder provides the buyer with the notice under subsection (c), a seller or holder may not: (1) accelerate the maturity of the agreement; or (2) commence legal action or repossess without legal process. (c) Notice.-- (1) Notice under this section shall be: (i) sent by certified mail to the buyer's last known address; or (ii) delivered personally to the residence of the buyer. (2) The notice shall inform the buyer of all the following: (i) The right to cure the default within 21 days of the date of receipt of the notice upon the payment of all the following: (A) The amount in default. (B) Late fees under section 6343 (relating to late fees). (C) Extension and deferment charges under section 6347 (relating to extension and deferment). (D) Actual repossession costs. (ii) The name, address and telephone number of the seller or holder. (iii) The total amount due, which is the sum of the items in subparagraph (i). (iv) The exact date by which the amount due must be paid. (v) The name, address and telephone number of the person to whom payment must be made. (vi) Other performance necessary to cure a default arising from other than nonpayment of the obligation. (3) The seller or holder is not required to provide the notice under this subsection more than once in any 12-month period. (d) Rights of buyer; curing default.-- (1) The buyer shall have the rights specified in the notice under subsection (c). (2) The act of curing a default restores to the buyer the rights under the agreement as though no default had occurred.

12 Pa.C.S. § 6310 Lien.

A contract, other than for services, may not provide for a lien on goods that are fully paid for or have not been sold by the seller.

12 Pa.C.S. § 6311 Validity.

A provision in a closed-end credit agreement or an open-end credit agreement that is prohibited by this chapter is void but does not otherwise affect the validity of the agreement.

12 Pa.C.S. § 6312 Discharge of obligation.

Unless a buyer has notice of the actual or intended assignment of a closed-end credit agreement or an open-end credit agreement, payment made by the buyer to the last known holder of the agreement shall, to the extent of the payment, discharge the buyer's obligation.

12 Pa.C.S. § 6313 Prepayment of obligation.

(a) Right to prepay.--Notwithstanding the provisions of a closed-end credit agreement or an open-end credit agreement, a buyer may prepay without additional charge at any time all or part of the time balance under the agreement. (b) Refund credit.-- (1) Pursuant to a closed-end credit agreement and subject to this chapter, the seller or holder may accelerate the balance due on the agreement but shall provide a refund credit calculated as of the date of the acceleration if: (i) the finance charges had been computed and added to the unpaid balance at the time the agreement was entered into; and (ii) the entire time balance under the agreement is prepaid prior to maturity. (2) The amount of the refund credit shall be computed by the actuarial method. (3) If the amount of the refund credit is less than $1, a refund does not need to be made. Cross References. Section 6313 is referred to in section 6327 of this title.

12 Pa.C.S. § 6314 Acknowledgment of payment in full.

Upon a buyer's request and after the payment of all sums for which the buyer is obligated under a closed-end credit agreement or an open-end credit agreement, the holder shall deliver or mail to the buyer at the buyer's last known address an instrument that: (1) Acknowledges that the obligation of the buyer under the agreement has been paid in full. (2) Releases all security in the goods under the agreement.

12 Pa.C.S. § 6321 General rules.

(a) Entire agreement.--Except as provided in section 6329(c) (relating to add-on sales), a closed-end credit agreement shall contain the entire agreement of the parties regarding the costs and terms of payment for the goods and services, including a promissory note or other evidence of indebtedness between the parties relating to the transaction. (b) Signature.--A seller may not obtain the signature of the buyer on the agreement if the agreement contains blank spaces to be filled in after it has been signed. (c) Installments.--A closed-end credit agreement may provide for unequal or irregular installments. (d) Incorporation by reference.--A holder may, in a buyer's subsequent closed-end credit agreement, incorporate by reference the buyer's previous closed-end credit agreement and a description of the collateral for the items purchased under the previous agreement.

12 Pa.C.S. § 6322 Contents.

Except as provided in section 6329 (relating to add-on sales), a closed-end credit agreement shall contain all of the following: (1) One of the following headings at the top of the agreement or directly above the space reserved for the signature of the buyer: (i) "Security Agreement" if the seller retains a security interest in the goods as security for the goods or services purchased. (ii) "Lien Contract" if the seller obtains a lien on other goods or nonresidential real estate as security for the goods or services purchased. (iii) "Closed-End Credit Agreement" if the seller does not obtain security for the goods or services purchased. (2) The names of the seller and buyer. (3) The place of business of the seller. (4) The residence or place of business of the buyer as specified by the buyer. (5) A description of the goods or services sufficient to identify them. Services or multiple items of goods may be described in general terms but in detail sufficient to identify them, in a separate writing. (6) The purchase price of the goods and services that are the subject matter of the sale. (7) The amount of the buyer's down payment, including the following: (i) An itemization of the amount paid in money and goods. (ii) A brief description of traded-in goods. (8) The difference between the purchase price under paragraph (6) and the amount under paragraph (7). (9) The amount included for insurance, including the specific coverage and cost. (10) The amount of official fees. (11) The unpaid balance, which is the sum of the amounts under paragraphs (8), (9) and (10). (12) The amount of the finance charge. (13) The time balance, which is the sum of the unpaid balance under paragraph (11) and the amount under paragraph (12), and the following: (i) The number of installments required. (ii) The amount of each installment expressed in dollars. (iii) The due date or period for each installment. (14) The time sale price. (15) The following notice provision: NOTICE TO THE BUYER Do not sign this agreement before you read it or if it contains any blank spaces. You are entitled to a completely filled-in copy of this agreement. You have the right to pay off in advance the full amount due. Under certain conditions, you may obtain a partial refund of the finance charge. (16) The following notice provision: NOTICE A holder of this agreement is subject to all the claims and defenses that the buyer could assert against the seller of goods or services obtained by this agreement or with the proceeds of this agreement. Recovery under this agreement by the buyer may not exceed the amount paid by the buyer under the agreement. (17) A statement that the seller may collect from the buyer late fees, costs of collection, costs from nonaffiliated entities and charges for deferment and extension as provided for in this chapter. Cross References. Section 6322 is referred to in section 6329 of this title.

12 Pa.C.S. § 6323 Copy of agreement.

(a) Delivery of copy.--Except as provided in section 6324(b) (relating to agreement resulting from telephone or mail communications), a seller shall provide a legible and complete copy of a closed-end credit agreement to a buyer when the buyer executes the agreement. (b) Obligation of buyer.--Until the seller completes the obligation under subsection (a), the buyer is obligated to pay only the purchase price under the agreement. (c) Acknowledgment.-- (1) The seller shall present an acknowledgment to the buyer specifying that the buyer has received a copy of the agreement. (2) The acknowledgment may be a separate document or contained in the agreement. (3) If the acknowledgment is contained in the agreement, it shall appear directly above the space reserved for the buyer's signature. (4) The buyer's written acknowledgment of delivery of a copy of the agreement in conformity with this subsection shall be a rebuttable presumption of delivery and compliance with this subsection in an action or proceeding by or against an assignee of the agreement without knowledge to the contrary when the agreement is purchased. Cross References. Section 6323 is referred to in section 6324 of this title.

12 Pa.C.S. § 6324 Agreement resulting from telephone or mail communications.

(a) General rule.--A closed-end credit agreement that is negotiated and entered into by a buyer and seller by telephone or mail is permitted under this subchapter and subject to this section if: (1) the seller did not personally solicit the sale; and (2) a catalog or other printed solicitation that is generally available to the public clearly sets forth the purchase price, time sale price and other terms regarding the sale of the goods or services. (b) Applicability.--For a sale under this section, section 6323(a) (relating to copy of agreement) does not apply. (c) Seller's completion of agreement.--If a seller under this section receives a closed-end credit agreement from a buyer and the agreement contains blank spaces, the seller may insert in the appropriate blank spaces the purchase price, time sale price and other terms regarding the sale of the goods or services, as set forth in the seller's current catalog or other printed solicitation. (d) Copy of agreement or statement.--Prior to the due date of the first installment under the agreement, the seller shall furnish to the buyer either a legible and complete copy of the agreement or a written statement of the items inserted in the blank spaces described in subsection (c). Cross References. Section 6324 is referred to in section 6323 of this title.

12 Pa.C.S. § 6325 Purchase money loan; notice.

(a) General rule.--Unless an instrument that evidences or embodies a debt arising from a purchase money loan contains the notice under subsection (b): (1) a purchase money lender may not take or receive the instrument; and (2) a seller may not accept the proceeds of the purchase money loan as full or partial payment for the sale. (b) Notice.--An instrument under subsection (a) shall contain the following notice: NOTICE A holder of this agreement is subject to all the claims and defenses that the buyer could assert against the seller of goods or services obtained with the proceeds of this agreement. Recovery under this agreement by the buyer may not exceed the amount paid by the buyer under the agreement. (c) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Purchase money lender." Either a seller or financing agency making or extending a purchase money loan. "Purchase money loan." An advance that is received by a buyer in return for a finance charge or interest that is applied to a purchase of goods or services from a seller who is affiliated, by common control or business arrangement, with the person extending the credit to the buyer.

12 Pa.C.S. § 6326 Statement to buyer.

(a) Request; contents.--At any time after the execution of a closed-end credit agreement and within one year after the last payment is made under the agreement, the holder of the agreement shall upon the good faith written request of the buyer promptly give or forward to the buyer a detailed written statement that accurately states the total unpaid amount under the agreement. (b) Copies.-- (1) The buyer shall be furnished with one statement under this section each year without charge. (2) The holder shall, upon request, furnish the buyer a duplicate copy of the statement upon payment of a reasonable fee not to exceed the cost of production. (c) Applicability.--This section does not apply to a transaction in which, instead of periodic statements of account, the buyer is provided with a passbook or payment book in which payments, credits, charges and the unpaid balance are entered.

12 Pa.C.S. § 6327 Refinancing.

(a) General rule.--Upon agreement in writing with the buyer, the holder of a closed-end credit agreement may refinance the payment of the unpaid time balance of the agreement by providing for a new schedule of installment payments. (b) Charges.-- (1) The holder may contract for and collect the payment of a refinance charge by the buyer. (2) A refinance charge shall be based on the amount refinanced and include the following: (i) The additional cost of insurance and official fees incident to the refinancing. (ii) The deduction of a refund credit in an amount equal to that to which the buyer would have been entitled under section 6313 (relating to prepayment of obligation) if the buyer had prepaid in full the obligations under the agreement. (3) A refinance charge may not exceed the rate of finance charges under section 6345 (relating to finance charges). (4) Subject to section 6342 (relating to insurance), an agreement may provide for payment of the additional cost of or premiums for continuing insurance coverage under the contract until the maturity of the contract. (c) Contents of agreement.--The refinancing agreement shall set forth all of the following: (1) The amount of the unpaid time balance to be refinanced. (2) The amount of a refund credit. (3) The amount to be refinanced after the deduction of the refund credit. (4) The amount of the finance charge under the refinancing agreement. (5) The additional cost of insurance and official fees to the buyer. (6) The new unpaid time balance. (7) The new schedule of installment payments. (d) Consolidation of contracts.--If there is a consolidation of two or more agreements, the provisions of section 6329(a) and (b) (relating to add-on sales) apply. Cross References. Section 6327 is referred to in sections 6352, 6353 of this title.

12 Pa.C.S. § 6328 New payment schedule.

(a) Right to new payment schedule.--If a closed-end credit agreement provides for the payment of an installment that is more than double the amount of the average of the preceding installments, the buyer upon default of this installment shall have an absolute right to obtain a new payment schedule. (b) Payments.--Unless agreed to by the buyer, the periodic payments under the new schedule may not be greater than the average of the preceding installments.

12 Pa.C.S. § 6329 Add-on sales.

(a) Add-on provisions.--A closed-end credit agreement that includes an add-on sales provision shall comply with the requirements of this chapter and may contain the following provisions: (1) The seller may add subsequent purchases made by the buyer to the agreement. (2) The total price of the goods or services covered by the agreement shall be increased by the price of the additional goods or services. (3) The seller may increase finance charges and installment payments proportionately. (4) The terms and conditions of the agreement shall apply equally to the additional goods or services. (5) The goods purchased under the previous agreement shall be security for the goods purchased under the subsequent agreement but only until the time sale price under the previous agreement is fully paid. (b) Allocation.-- (1) When a subsequent purchase is made, the entire amount of all previously made payments is deemed to have been applied toward the payment of the previous time sale price. (2) A payment received after a subsequent purchase is made is deemed to be allocated to all the various time sale prices in the same proportion or ratio as the original purchase prices of the various purchases bear to one another. (3) If the amount of each installment payment is increased in connection with the subsequent purchase, the subsequent payments at the seller's election may be deemed to be allocated as follows: (i) An amount equal to the original installment payment to the previous time sale price. (ii) An amount equal to the increase to the subsequent time sale price. (4) The amount of an initial or down payment on a subsequent purchase is deemed to be allocated in its entirety to the subsequent purchase. (c) New agreement.--When a subsequent purchase is made, the seller shall deliver to the buyer prior to the due date of the first installment a new agreement that sets forth all of the following: (1) The information under section 6322(1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11) and (12) (relating to contents) as it relates to the subsequent purchase. (2) The unpaid time balance of the prior agreement with the seller. (3) The new unpaid balance, which is the sum of the amount under paragraph (2) and the amount described in section 6322(11) for the subsequent purchase. (4) The consolidated time balance, which is the sum of the unpaid balance under paragraph (3) and the amount of the finance charge payable by the buyer to the seller, including the following: (i) The number of installments required. (ii) The amount of each installment expressed in dollars. (iii) The due date or period for each installment. (5) A statement that the seller is adding the subsequent purchase to the buyer's existing agreement in accordance with the provisions of that agreement. Cross References. Section 6329 is referred to in sections 6321, 6322, 6327, 6333, 6353 of this title.

12 Pa.C.S. § 6331 Establishment.

(a) Seller.--A seller may enter into an open-end credit agreement upon the request of a buyer or prospective buyer. (b) Financing agency.--Subject to the other provisions of this chapter, a financing agency may enter into an open-end credit agreement on behalf of a seller from whom the financing agency may, with the buyer's consent, purchase or acquire the buyer's indebtedness, to be paid according to the agreement.

12 Pa.C.S. § 6332 Requirements.

(a) Signature.--A seller may not obtain the signature of a buyer on an application for an open-end credit agreement if it contains blank spaces to be filled in after it has been signed. (b) Separate agreement unnecessary.--A buyer does not need to sign a separate account agreement when a new purchase is made under an existing agreement. (c) Heading.--The following heading shall appear at the top of the agreement or directly above the space reserved for the signature of the buyer: (1) "Security Agreement" if the seller retains a security interest in the goods as security for the goods or services purchased. (2) "Lien Contract" if the seller obtains a lien on other goods or nonresidential real estate as security for the goods or services purchased. (3) "Open-End Credit Agreement" if the seller does not obtain security for the goods or services purchased. (d) Entire agreement.--The written agreement shall contain the entire agreement of the parties regarding the costs and terms of payment for the goods and services.

12 Pa.C.S. § 6333 Applicability and effect of subchapter.

(a) Security interest.--This subchapter does not prohibit the execution of an agreement between a buyer and seller whereby the seller retains a security interest in goods sold to the buyer until full payment has been made. (b) Allocation.--Section 6329(b) (relating to add-on sales) governs goods sold under an agreement under subsection (a). (c) Notes; third party rights.--An open-end credit agreement may not require or entail the execution of a note by the buyer that when separately negotiated will eliminate as to a third party a right of action or defense that the buyer may have against the seller.

12 Pa.C.S. § 6341 Applicability.

A seller may contract for or collect a fee, expense or charge only if the fee, expense or charge is specifically set forth in this chapter.

12 Pa.C.S. § 6342 Insurance.

(a) Compliance with law.--The following shall comply with the act of September 2, 1961 (P.L.1232, No.540), known as the Model Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance: (1) The seller and buyer, if: (i) the cost of the insurance is included in the closed-end credit agreement; and (ii) a separate charge is made to the buyer for the insurance. (2) The seller or holder, if the insurance is to be procured by the seller or holder under an open-end credit agreement. (b) Separate charge; agreement.-- (1) If the cost of insurance is to be separately charged to the buyer under an open-end credit agreement, the buyer and seller must so specify in a signed agreement. (2) A copy of the agreement under paragraph (1) shall be given or furnished to the buyer. (3) The agreement shall state whether the insurance is to be procured by the buyer, seller or holder. Cross References. Section 6342 is referred to in sections 6302, 6327, 6347 of this title.

12 Pa.C.S. § 6343 Late fees.

(a) Closed-end credit agreement.-- (1) A closed-end credit agreement may provide for the payment by the buyer of a late fee on each installment in default for a period of not less than ten days in an amount not in excess of 5% of the installment or $10, whichever is less. (2) Only one late fee may be collected on an installment regardless of the period that it remains in default. (b) Open-end credit agreement.--A late fee may be assessed on an open-end credit agreement regarding each minimum payment not paid in full on the payment due date of the statement on which the minimum payment first appears. Cross References. Section 6343 is referred to in sections 6302, 6309, 6352, 6353 of this title.

12 Pa.C.S. § 6344 Costs of collection.

A closed-end credit agreement or an open-end credit agreement may provide for payment of actual and reasonable costs of collection only if any of the following occurs: (1) If the goods are subject to a security interest, the goods are removed from this Commonwealth without the written permission of the holder. (2) The buyer fails to notify the holder of a change of residence. (3) The buyer fails to communicate with the holder for a period of 45 days after a default in making payments due under the agreement. Cross References. Section 6344 is referred to in sections 6302, 6352, 6353 of this title.

12 Pa.C.S. § 6345 Finance charges.

(a) General rule.--Pursuant to this section and the provisions of a closed-end credit agreement or an open-end credit agreement, a seller and holder may charge, receive and collect a finance charge. (b) Closed-end credit agreement.--A finance charge under a closed-end credit agreement shall be: (1) measured for a period between the date of the agreement and the due date of the last installment; and (2) calculated for the period according to the actuarial method or the United States Rule method, at a rate agreed to by the buyer and the seller or holder. (c) Open-end credit agreement.-- (1) Except as provided in paragraph (2), a finance charge on an open-end credit agreement: (i) shall be computed based on the outstanding monthly balances; and (ii) may not exceed the rate agreed to by the buyer and the seller or holder. (2) A minimum finance charge of $1 per month may be made for each month, if the finance charge so computed is less than that amount. Cross References. Section 6345 is referred to in sections 6327, 6352, 6353 of this title.

12 Pa.C.S. § 6346 Costs from nonaffiliated entity.

A closed-end credit agreement and an open-end credit agreement may provide for the reimbursement from a buyer of costs for a service provided by an entity that is not otherwise affiliated with the seller or holder if all the following conditions exist: (1) The buyer requests that the seller or holder provide the service. (2) The service is for the convenience of the buyer. (3) The seller or holder contracts with the entity to provide the service to the buyer or other buyers. (4) The seller or holder actually incurs the costs of the service provided by the entity. (5) The costs incurred for the service are reasonable and necessary. (6) The reimbursement costs received from the buyer do not exceed the costs incurred by the seller or holder. Cross References. Section 6346 is referred to in section 6302 of this title.

12 Pa.C.S. § 6347 Extension and deferment.

(a) General rule.--Upon agreement with the buyer, the holder of a closed-end credit agreement or an open-end credit agreement may extend the scheduled due date or defer the scheduled payment of all or part of an installment payable under the agreement. (b) Charges.-- (1) A charge may not be made for an extension or a deferment unless the extension or deferment agreement is in writing and signed by the parties. (2) Subject to paragraph (3), the holder may contract for and collect the payment of an extension or deferment charge from the buyer. (3) Except as provided in paragraph (4), the charge under paragraph (2) may not exceed an amount equal to 1.5% per month simple interest on the full amount or part of the installment for the extension or deferment period, which may not exceed the period: (i) from the date when the extended or deferred installment would have been payable in the absence of the extension or deferment; and (ii) to the date when the installment is made payable under the extension or deferment agreement. (4) A minimum charge of $10 for the extension or deferment period may be made if the computed extension or deferment charge amounts to less than $10. (5) Subject to section 6342 (relating to insurance), the agreement may provide for payment of the additional cost of or premiums for continuing insurance coverage under the agreement until the end of the extension or deferment period. Cross References. Section 6347 is referred to in sections 6302, 6309, 6352, 6353 of this title.

12 Pa.C.S. § 6348 Interest rate after maturity.

If a balance remains unpaid at the expiration of the scheduled maturity date of a closed-end credit agreement, the rate of the finance charge for the period beginning at the date of the maturity until payment in full may not exceed the rate of the finance charge under the original agreement. Cross References. Section 6348 is referred to in sections 6352, 6353 of this title.

12 Pa.C.S. § 6351 Willful and intentional violations.

A person who willfully and intentionally violates or directs or consents to the violation of a provision of this chapter commits a misdemeanor and shall, upon conviction, be sentenced to pay a fine of not more than $1,000 or to imprisonment for not more than one year, or both.

12 Pa.C.S. § 6352 Noncompliance; costs and charges.

(a) Bar to recovery.--If a seller fails to comply with the provisions of this chapter, the seller or holder who acquires a closed-end credit agreement or an open-end credit agreement with knowledge of the noncompliance is barred from recovery of the following costs and charges imposed in connection with the agreement: (1) Refinance charges under section 6327 (relating to refinancing). (2) Late fees under section 6343 (relating to late fees). (3) Costs of collection under section 6344 (relating to costs of collection). (4) Finance charges under section 6345 (relating to finance charges). (5) Extension and deferment charges under section 6347 (relating to extension and deferment). (6) Interest after maturity under section 6348 (relating to interest rate after maturity). (b) Remedy of buyer.--The buyer shall have the right to recover from the person under subsection (a) an amount equal to the charges under subsection (a) that were paid by the buyer. Cross References. Section 6352 is referred to in section 6306 of this title.

12 Pa.C.S. § 6353 Willful violations regarding finance charges.

(a) Penalty.--If a seller or holder willfully violates a provision of this chapter regarding the imposition, computation or disclosure of a finance charge on a consolidated total of two or more agreements under section 6329 (relating to add-on sales), the buyer may recover from the seller or holder an amount equal to three times the total of the following, which have been actually paid by the buyer: (1) Refinance charges under section 6327 (relating to refinancing). (2) Late fees under section 6343 (relating to late fees). (3) Costs of collection under section 6344 (relating to costs of collection). (4) Finance charges under section 6345 (relating to finance charges). (5) Extension and deferment charges under section 6347 (relating to extension and deferment). (6) Interest after maturity under section 6348 (relating to interest rate after maturity). (b) Bar to recovery.--If a violation has occurred under this section, the seller or holder is barred from the recovery of the costs and charges under subsection (a).

12 Pa.C.S. § 6354 Corrections.

(a) General rule.--Notwithstanding the provisions of this chapter and subject to subsection (b), a seller or holder may correct a failure to comply with a provision of this chapter in accordance with this section unless a willful violation has occurred. (b) Concurrence by buyer.--A correction that will increase the amount owed by the buyer or the amount of a payment is not permitted unless the buyer concurs in writing with the correction. (c) No liability.--If a seller or holder corrects a violation in accordance with this section, the seller and holder are not subject to penalty under this subchapter. (d) Delivery.--Within 30 days of the execution of the original closed-end credit agreement or open-end credit agreement by the buyer, a correction may be delivered to the buyer in the form of a corrected copy of the agreement. (e) Credit.--An amount improperly collected from the buyer shall be: (1) credited against the indebtedness evidenced by the agreement; or (2) refunded to the buyer if the debt has already been satisfied.

12 Pa.C.S. § 6355 Unfair trade practice.

A violation of any provision of this chapter shall be deemed to be a violation of the act of December 17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices and Consumer Protection Law.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=12Fetched: 10/16/2026