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2010 New York Code
PEP - Personal Property
Article 10 - (401 - 422) RETAIL INSTALMENT SALES ACT
413 - Retail instalment credit agreements.
§ 413. Retail instalment credit agreements. 1. (a) A retail instalment
credit agreement shall be dated and in writing and the printed portion
thereof shall be in at least eight point type. No retail instalment
credit agreement shall be signed by the buyer when it contains blank
spaces to be filled in after it has been signed by the buyer. The
seller, before he shall be able to avail himself of the rates authorized
by subdivision three of this section, shall deliver to the buyer a copy
of the credit agreement executed by the seller.
(b) Provided that the retail installment credit agreement complies in
all other respects with the provisions of this section, a single credit
agreement may provide for a retail seller to acquire indebtedness of a
retail buyer under a sales slip or memorandum evidencing a purchase.
Where a retail seller enters into a credit agreement with a retail buyer
the credit agreement may consist of an agreement complying in all other
respects with the provisions of this section, but executed only by the
retail seller, together with a credit card issued by it to the retail
buyer. The credit agreement, however, must then provide that it shall
not become effective unless and until the retail buyer or a person
authorized by him signs a sales slip or memorandum evidencing a purchase
or lease of property or services by use of the credit card and that
prior thereto the retail buyer shall not be responsible for any purchase
or lease of property or services by use of the credit card after its
loss or theft.
2. Every retail instalment credit agreement shall contain:
(a) The entire agreement of the buyer with respect to the subject
matter of the credit agreement;
(b) The names of the seller and of the buyer, the place of business of
the seller and the residence or place of business of the buyer as
specified by the buyer;
(c) Both at the top thereof and directly above the space reserved for
the signature of the buyer, the words RETAIL INSTALMENT CREDIT AGREEMENT
in at least ten point bold type;
(d) A provision in at least eight point bold type to the effect that
the buyer may at any time pay his total indebtedness; and
(e) A notice in at least eight point bold type reading as follows:
NOTICE TO THE BUYER: 1. Do not sign this credit agreement before you
read it or if it contains any blank space. 2. You are entitled to a
completely filled in copy of this credit agreement.
3. (a) A seller may, in a retail instalment credit agreement, contract
for and, if so contracted for, the seller or holder thereof may charge,
receive and collect the service charge authorized by this article, which
service charge shall not exceed the rate or rates agreed upon by the
seller and the buyer, including, in accordance with the provisions of
the credit agreement, rates that may vary, from time to time computed,
for the purposes of this section, on the outstanding indebtedness from
month to month, or if the service charge so computed is less than
seventy cents for any month, seventy cents. If the credit agreement
provides for a variable rate of service charge, such rate shall be
determined at regular intervals as set forth in the credit agreement and
in accordance with such regulations as the banking board shall prescribe
but said rate shall not vary more often than once in any three month
period and shall be based on a published index that is (a) readily
available, (b) independently verifiable, (c) beyond the control of the
seller and (d) approved by the superintendent, (e) such charges in
credit agreements shall be based on the index values, or the index
numbers plus or minus additional percentage points provided, however,
that variations in the charge must correspond directly to the movements
of the index values plus or minus additional percentage points only.
Once such charge is established no lending institution may add any
factors to increase the charge other than variations in the established
index without the prior approval of the banking board.
The banking board shall adopt regulations with respect to credit
agreements that provide for a variable rate of service charge, including
but not limited to: (a) providing for disclosure to the buyer by the
seller of the circumstances under which the rate may increase, any
limitations on the increase, the effect of an increase and an example of
the payment terms that would result from an increase; (b) providing for
disclosure to the buyer by the seller of a history of the fluctuations
of the index over a reasonable period of time; and (c) providing for
notice to the buyer by the seller prior to any rate increase or change
in the terms of payment. The regulations shall allow a seller, holder or
financing agency after choosing an approved index to choose a spread and
a minimum and maximum rate of service charge at its discretion. A retail
instalment credit agreement, whether it provides for a fixed or variable
service charge, may provide for an introductory rate of service charge
at either a fixed or variable rate, provided that the terms of such
introductory rate, including, if applicable, the date on which the
introductory rate shall terminate, are disclosed to the buyer. Such
disclosure shall be contained on an application form or pre-approved
written solicitation as specified pursuant to subdivisions one and one-a
of section five hundred twenty of the general business law. A change in
the service charge rate upon expiration of an introductory rate shall
not be considered a variable rate or a change in terms. The service
charge rate in effect after expiration of an introductory rate may apply
to all amounts due under the credit agreement regardless of when
incurred, and disclosure of the same shall be provided to the buyer in
the written agreement.
(b) If the credit agreement so provides, the service charge may be
computed on a schedule of fixed amounts if as so computed it is applied
to all amounts of outstanding balances equal to the fixed amount minus a
differential of not more than five dollars, provided that it is also
applied to all amounts of outstanding balances equal to the fixed amount
plus at least the same differential.
(c) (i) For the purposes of this subdivision the term "outstanding
indebtedness from month to month" shall mean, at the election of the
seller, holder or financing agency either:
(a) the amount unpaid at the beginning of the monthly billing period,
including unpaid service charges, less all payments received and credits
issued during the billing period, except for credits attributable to
amounts not included in the previous balance; or
(b) an amount not to exceed the amount calculated by adding the
amounts unpaid for each day of the monthly billing period, including
unpaid service charges, after reflecting that day's purchases made,
payments received, credits issued and other adjustments, and dividing
such sum by the number of days in the billing period.
(ii) A credit agreement may not provide for the imposition of a
service charge for any monthly billing period in which there is no
previous balance or during which the sum of the payments received and
other credits issued which are attributable to amounts included in the
previous balance is equal to or exceeds the amount of such previous
balance unless the same seller also offers a credit agreement which
provides that no service charge will be imposed for any monthly billing
period in which there is no previous balance or during which the sum of
the payments received and other credits issued which are attributable to
amounts included in the previous balance is equal to or exceeds the
amount of such previous balance.
(iii) The term "billing period" as used in this subdivision shall mean
the time interval between periodic statement dates, pursuant to
subdivision four of this section. A billing period shall be considered
to be a "month" or "monthly" if the last day of each billing period is
on the same day of each month or does not vary by more than four days
therefrom.
(d) Where a retail instalment credit agreement provides that the buyer
has the option of avoiding the imposition of an additional service
charge by paying the outstanding indebtedness or any portion thereof
within a specified period of time, the additional service charge may not
be imposed unless the monthly statement showing such outstanding
indebtedness or portion thereof is mailed at least fifteen days prior to
the date by which payment must be received to avoid that service charge.
A seller or holder shall not be prohibited from imposing a service
charge, or required to refund a service charge, if failure to comply
with the provisions of this paragraph resulted from circumstances beyond
the control of the seller or holder, notwithstanding reasonable
procedures to insure compliance with this paragraph.
(e) No change in the terms of a retail instalment credit agreement
shall take effect unless at least 30 days prior to the effective date of
such change, a written notice has been mailed or delivered to the buyer
that clearly and conspicuously describes such change and the
indebtedness to which it applies, and if the change has the effect of
increasing the rate of service charge, either (a) the notice states that
the incurrence by the buyer or another person authorized by him of any
further indebtedness under the plan to which the agreement relates on or
after the effective date of such change specified in the notice shall
constitute acceptance of such change, and either the buyer agrees in
writing to such change or the buyer or another person authorized by him
incurs such further indebtedness on or after the effective date of the
change stated in the notice, or (b) the notice advises the buyer that he
has thirty days from the earlier of the mailing or delivery of the
notice to advise the seller under or holder of a retail installment
credit agreement in writing that he does not accept such change,
provided that such notice contains an address to which the buyer may
send notice of his election not to accept the change and also provided
that the notice specifies that the change will take effect absent
receipt of the buyer's written objection to the change. Any buyer who
has received a notice pursuant to clause (a) who does not agree in
writing to the change and no further indebtedness is incurred under the
plan to which the agreement relates, and any buyer who gives a timely
notice, pursuant to clause (b), electing not to accept the change shall
be permitted to pay his outstanding indebtedness in accordance with the
terms of the retail installment credit agreement but the seller or
holder may terminate the amount of credit available to the buyer and may
require the buyer to return all credit cards issued in connection with a
retail installment credit agreement. If such a buyer subsequently uses a
credit card to obtain credit under a retail installment credit
agreement, such use shall constitute acceptance of the change of terms
and shall be deemed to have been accepted and shall become effective as
to the buyer as of the date such change would have become effective but
for the giving of notice by the buyer. If notice is given pursuant to
clause (b) and the buyer does not timely object in writing to the
change, such change shall become effective without action on the part of
the buyer; provided that in no event shall any such change take effect
with respect to (i) that portion of the outstanding indebtedness from
month to month which represents indebtedness outstanding prior to
January 1, 1981, and (ii) that portion of the outstanding indebtedness
from month to month which represents indebtedness incurred, under or
pursuant to an agreement in effect on December 1, 1980, between January
1, 1981, and the effective date of such change specified in the first
notice mailed or delivered pursuant to clause (a). Indebtedness
outstanding prior to January 1, 1981 for purpose of clause (i) above and
indebtedness outstanding prior to the effective date of a change for
purposes of clause (ii) above shall be determined on the basis of
crediting payments and other credits first to that portion of any such
indebtedness representing any service charges and then to that portion
of such indebtedness representing purchases and other debits in the
order in which made. An amendment to a credit agreement deleting a
provision that the rate of service charge may vary from time to time may
not become effective within one year from the later of the effective
date of the credit agreement or the effective date of an amendment to
the credit agreement adding a variable rate provision. For purposes of
this paragraph, an adjustment in the rate of the service charge as a
consequence of the movement in the selected index shall not constitute a
change in the terms of that agreement. A reduction in the grace period
for the assessment of a fee on any installment not paid when due, shall
be considered an amendment to an agreement as set forth in this
paragraph. The provisions of this paragraph shall not apply in the case
of an agreement which expressly prohibits changing of terms or which
provides limitations on changing of terms which are more restrictive
than the requirements of this paragraph.
Any service charge, whether assessed by a fixed or variable rate, may
be reduced on such terms as the seller may determine, provided that the
terms of such reduction, including, if applicable, the date on which the
reduction will terminate, are disclosed to the buyer on the written
notice announcing the reduction, prior to the effective date of the
reduction. A new method of determining a service charge is a reduction
in the service charge if the charge determined under the new method
never exceeds the charge under the original method. The original service
charge or original method of determining the service charge may be
applied after the reduction ends to the entire outstanding indebtedness,
including any indebtedness incurred when the reduced service charge
applied, and disclosure of the same shall be provided to the buyer in
the written notice announcing the reduction. A reduction to a service
charge, including the resumption of the original service charge or the
original method of determining the service charge, shall not be
considered a change in terms for purposes of this paragraph.
3-a. No retail instalment credit agreement or guarantee of a retail
instalment credit agreement shall provide for a security interest in any
investment property, as defined in paragraph forty-nine of subsection
(a) of section 9--102 of the uniform commercial code, that is pledged as
collateral, unless (a) the contract either specifically identifies the
investment property as collateral or (b) the secured party is a
securities intermediary, as defined in paragraph fourteen of subsection
(a) of section 8-102 of the uniform commercial code, or commodity
intermediary, as defined in paragraph seventeen of subsection (a) of
section 9--102 of the uniform commercial code, with respect to the
investment property. The identification of an account shall include the
name of the holder, account number, and name of the entity holding the
investment property. In the event that a retail instalment credit
agreement or guarantee does not comply with this section, the security
interest in the investment property is void.
4. The seller or holder under a retail instalment credit agreement
shall promptly provide the buyer under the agreement with a statement as
of the end of each monthly period (which need not be a calendar month)
containing
(a) The items required to be set forth pursuant to the act of congress
entitled "Truth in Lending Act" and the regulations thereunder, as such
act and regulations may from time to time be amended; and
(b) A legend to the effect that the buyer may at any time pay his
total indebtedness.
5. (a) The fees and charges authorized by this subdivision and
subdivision three of this section shall be inclusive of all charges
incident to investigating and making the retail instalment credit
agreement and for the extension of credit thereunder. No fee, expense,
delinquency, collection or other charge whatsoever shall be taken,
received, reserved or contracted for by the seller under or holder of a
retail instalment credit agreement except as provided in this section. A
retail instalment credit agreement may provide for the payment of
attorney's fees not exceeding twenty per centum of the amount due and
payable under the credit agreement if it is referred to an attorney not
a salaried employee of the seller or holder for collection.
(b) In addition to the service charge on outstanding indebtedness
permitted under subdivision three of this section, the seller or holder
may charge, receive and collect any one or more of the fees and charges
described in this paragraph, provided that any such fee or charge is
provided for in the retail instalment credit agreement. When credit
cards are issued in connection with a retail instalment credit
agreement, the retail instalment credit agreement may provide for an
annual fee for membership in the credit card plan. If a buyer has
requested the issuance of a credit card, the fee for the first year may
be charged by the seller or holder at any time. The seller or holder
shall in each subsequent year in which an annual fee is payable, send
the buyer in or with the statement for the monthly billing period before
that in which the fee is to be billed, a notice that the annual fee will
be billed in the next monthly statement. A buyer who is not delinquent
or otherwise in breach of any term of the agreement with the seller or
holder shall have the right during the first six months after the annual
fee is billed to notify the seller or holder in writing, at its address
on the credit agreement, to terminate the buyer's account and request a
refund of the unused portion of the annual fee previously paid. Upon
receipt of the termination notice and refund request from such buyer,
the seller or holder shall refund to the buyer the unused pro-rata share
of any annual fee previously paid as of the first billing statement date
after receipt of the termination notice. The retail installment credit
agreement may provide for the assessment of a fee for any installment
which is not paid on or before the date on which it is due. A seller or
holder that imposes a fee for late payments without allowing a grace
period of at least ten days must credit any cash payment made by a buyer
to an authorized representative of the seller or holder at all stores,
or to a teller at a branch where deposits are accepted, as of the date
of the receipt of the payment. The retail installment credit agreement
may, in addition, provide for an overlimit charge. The overlimit charge
may be imposed whenever the specified credit limit is exceeded but not
more than once in a monthly billing cycle. If the overlimit charge is
imposed, the credit limit must be disclosed on the monthly billing
statement. The retail installment credit agreement also may provide for:
(i) a returned payment charge, in the amount set forth in section 5-328
of the general obligations law, for any check or other method of payment
that is returned unpaid, excluding payment made by automated teller
machine or other electronic media; (ii) a charge for replacement of lost
or stolen credit cards, which charge shall be applied only where a buyer
has suffered a lost or stolen credit card after two replacements
thereof; (iii) a charge for additional credit cards for the buyer's
account; and (iv) a charge for copies of sales slips, monthly statements
and other documents when such copies are not required by federal or
state law governing billing error disputes.
Sections 190.40 and 190.42 of the penal law shall not apply to fees
and charges set forth in this subdivision. For purposes of 12 U.S.C. §§
85, 1831 d, 1463(g) and 1785 (g), the fees and charges permitted under
this subdivision are interest under New York law, and all terms,
conditions, and other provisions of a retail instalment credit
agreement, including without limitation, fees and charges, provisions
relating to the method of determining the outstanding indebtedness on
which a service charge is imposed and circumstances in which a service
charge may be avoided, are material to the determination of the interest
rate under New York law.
6. If the cost of any insurance is to be separately charged to the
buyer, the retail instalment credit agreement shall state whether the
insurance is to be procured by the buyer or the seller or holder. If
the insurance is to be procured by the seller or holder, the seller or
holder shall comply with the provisions of subdivision five of section
four hundred two.
7. No retail instalment credit agreement shall require or entail the
execution of any note or series of notes by the buyer which when
separately negotiated will cut off as to third parties any right of
action or defense which the buyer may have against the seller.
8. The provisions of subdivisions four and five of section four
hundred two A and of sections four hundred six and four hundred twelve
hereof shall be applicable to retail instalment credit agreements. The
words "credit service charge" in subdivisions four and five of section
four hundred two A shall read "service charge" for the purposes of this
section.
9. The service charge allowed in subdivision three of this section
shall be allowed to a seller or holder under this section only:
(a) If the seller enters into an agreement subject to the provisions
of this article with any buyer on or after October first, nineteen
hundred fifty-seven; or
(b) In the case of any buyer who had entered into an agreement with a
seller prior to October first, nineteen hundred fifty-seven, if the
seller or holder delivers or mails to the buyer a copy of a retail
instalment credit agreement in conformity with this section duly
executed on behalf of the seller and the seller or holder thereafter
complies with all the other provisions of this section.
Nothing in this subdivision contained shall be construed to affect the
validity or invalidity of any agreement or alleged agreement made prior
to October first, nineteen hundred fifty-seven.
10. No retail instalment credit agreement shall contain any provision
by which:
(a) In the absence of the buyer's default, the holder may, arbitrarily
and without reasonable cause, accelerate the maturity of any part or all
of the amount owing thereunder;
(b) A power-of-attorney is given to confess judgment in this state, or
an assignment of wages is given;
(c) The buyer waives any right of action against the seller or holder
of the agreement, or other person acting on his behalf, for any illegal
act committed in the collection of payments under the agreement;
(d) The buyer executes a power-of-attorney appointing the seller or
holder of the agreement, or other person acting on his behalf, as the
buyer's agent in collecting payments under the agreement;
(e) The buyer relieves the seller from liability for any legal remedy
which the buyer may have against the seller under the agreement or
otherwise;
(f) The buyer waives any right to a trial by jury in any action or
proceeding arising out of the agreement.
(g) The buyer consents to receive any goods or services on a regular
or irregular basis. Any such consent to receive goods or services must
be separately agreed to by the buyer in a writing other than the retail
instalment credit agreement.
Any such prohibited provision shall be void but shall not otherwise
affect the validity of the contract.
11. (a) Provided that the retail instalment credit agreement complies
in all other respects with the provisions of this section, a financing
agency may enter into a credit agreement with a retail buyer for its own
account or on behalf of one or more retail sellers or municipal
corporations, or the New York city water board, which need not be named
in the agreement, pursuant to which the financing agency may, with the
buyer's consent, purchase or acquire from one or more retail sellers or
municipal corporations, or the New York city water board, which need not
be named in the credit agreement, indebtedness of the buyer under a
sales slip or memorandum evidencing a purchase or fine, civil penalty,
rent, rate, tax, fee, charge, revenue, financial obligation, or other
amount, including a penalty, special assessment or interest, to be paid
in accordance with the agreement. Such a credit agreement shall contain
the name and place of business of the financing agency in lieu of those
of a retail seller, municipal corporation or the New York city water
board, and may not contain any provision for a security interest in real
or personal property or fixtures of the buyer to secure payment or
performance of the buyer's obligation under the credit agreement other
than a security interest in a specifically identified interest-bearing
deposit account of the buyer with such financing agency. A financing
agency may in such a credit agreement contract for, and if it has so
contracted and delivered to the buyer a copy of the credit agreement
executed by it, may charge, receive and collect the service charge
authorized by this section. Each sales slip or memorandum evidencing a
purchase or fine, civil penalty, rent, rate, tax, fee, charge, revenue,
financial obligation, or other amount, including a penalty, special
assessment or interest due to a municipal corporation or the New York
city water board from the buyer to be paid in accordance with such a
credit agreement shall refer to the credit agreement between the buyer
and the financing agency by account number or otherwise and contain the
names of the retail buyer and the retail seller, municipal corporation
or the New York city water board.
A financing agency which purchases from more than one seller or
municipal corporation or which purchases from the New York city water
board indebtedness of a retail buyer to be paid in accordance with such
a retail instalment credit agreement entered into by the financing
agency with the buyer as provided in this subdivision may charge,
receive and collect the service charge authorized by subdivision three
of this section only if the service charge so authorized is computed on
the buyer's total outstanding indebtedness to the financing agency from
month to month to be paid in accordance with such a retail instalment
credit agreement.
(b) A financing agency may enter into a credit agreement with a retail
buyer for its own account or on behalf of one or more authorized
insurers or insurance agents or insurance brokers, who need not be named
in the agreement, pursuant to which the financing agency may, with the
buyer's consent, purchase or acquire from one or more authorized
insurers or insurance agents or brokers, who need not be named in the
agreement, the buyer's indebtedness under a sales slip or memorandum
evidencing a purchase of insurance under an insurance contract or
contracts, provided that (i) such credit agreement complies with the
requirements of paragraph (a) of this subdivision, and (ii) such credit
agreement does not permit cancellation of the insurance contract or
contracts as a result of default under the credit agreement by the
buyer. For purposes of this paragraph, the terms "authorized insurer",
"insurance contract", "insurance agent", and "insurance broker" shall be
as defined in or have the meanings assigned to them by section one
hundred seven of the insurance law.
(c) A single credit agreement entered into pursuant to either
paragraph (a) or paragraph (b) of this subdivision may provide for the
financing agency to acquire indebtedness of a retail buyer under a sales
slip or memorandum evidencing a purchase or, if applicable, a fine,
civil penalty, rate, rent, tax, fee, charge, revenue, financial
obligation or other amount, including a penalty, special assessment, or
interest, pursuant to the other of said paragraphs. Where a financing
agency enters into a credit agreement with a retail buyer for its own
account, the credit agreement may consist of an agreement complying in
all other respects with the provisions of this section, but executed
only by the financing agency, together with a credit card issued by it
to the retail buyer. The credit agreement, however, must then provide
that it shall not become effective unless and until the retail buyer or
a person authorized by him signs a sales slip or memorandum evidencing
purchase or lease of property or services or the payment of a fine,
civil penalty, rent, rate, tax, fee, charge, revenue, financial
obligation or other amount, including a penalty, special assessment or
interest, to a municipal corporation or the New York city water board by
use of the credit card and that prior thereto the retail buyer shall not
be responsible for any purchase or lease of property or services or the
payment of a fine, civil penalty, rate, rent, tax, fee, charge,
financial obligation, or other amount, including a penalty, special
assessment or interest, by use of the credit card after its loss or
theft.
(d) A credit agreement entered into pursuant to paragraph (a) or (b)
of this subdivision shall contain or be accompanied by a statement
making the disclosures required by the act of congress entitled "Truth
in Lending Act" and the regulations thereunder, as such act and
regulations may from time to time be amended.
(e) A financing agency enters into a credit agreement provided for in
this subdivision in this state, for purposes of this article, if the
financing agency delivers or mails in this state to the buyer a copy of
the agreement executed by the financing agency, provided, however, that
in order to reduce the potential for theft or fraud, a financing agency
may mail the credit agreement from outside the state if the credit
agreement is prepared and sealed in the state before mailing and prior
to being transported to a location outside of the state for actual
mailing.
(f) For the purpose of this subdivision, the term "municipal
corporation", as defined in subdivision twenty-two of section four
hundred one of this chapter, shall include the White Plains parking
authority, and the term "purchase" shall include any fee, rate, rent or
other charge of such authority.
12. (a) Except as provided in paragraphs (b) and (c) of this
subdivision, no retail instalment credit agreement, or any agreement
executed in connection therewith, may provide for the creation of a
security interest in any personal or real property (including any goods
sold under such agreement) to secure payment of the buyer's outstanding
indebtedness under such retail instalment credit agreement. Any such
prohibited provision shall be void but shall not otherwise affect the
validity of such retail instalment credit agreement.
(b) A financing agency may require a pledge to such financing agency
of a specifically identified interest-bearing deposit account of the
buyer maintained at such financing agency as collateral security for a
loan made by such financing agency under the authority of this
subdivision and provided further that any such financing agency which
requires such a pledge shall be subject to the provisions of section
five hundred twenty-b of the general business law.
(c) Except for motor vehicles as defined in article nine of this
chapter, or goods which the seller knows or reasonably should know are
or are likely to be so affixed to a motor vehicle or to realty as to
become a part thereof, a retail seller, or financing agency which enters
into a retail installment credit agreement with a retail buyer on behalf
of a retail seller named in the agreement, may take or retain a purchase
money security interest, as that term is defined in section 9--103 of
the uniform commercial code, in any item of merchandise purchased at a
price of not less than two hundred dollars pursuant to a retail
installment credit agreement until the purchase price of such
merchandise is fully paid, but in no event shall any purchase money
security interest created hereunder be valid or enforceable for a period
greater than five years from the date a purchase is posted to any
account which may be used to purchase an item of merchandise at a price
less than two hundred dollars. In the event such a purchase money
security interest is taken or retained by a retail seller or financing
agency, payments shall be applied to the purchase in the order such
purchases are posted to the account after such payments are first
applied to any finance, late, or other charges imposed by the retail
seller or financing agency. Notwithstanding the provisions of section
9--609 of the uniform commercial code, repossession of merchandise
subject to a purchase money security interest permitted under this
subdivision shall be prohibited unless and until payment on the account
shall be in default for a period of at least thirty days and thereafter
a notice of default be mailed to the buyer providing an additional
thirty days time in which to cure the default on the account. In the
event of repossession without judicial process, a substantially
contemporaneous writing signed by the buyer indicating the buyer's
agreement to such repossession shall be required.
13. (a) Subject to the limitation contained in paragraph (b) of this
subdivision, the holder of a retail instalment credit agreement
(including for purposes of this subdivision a financing agency which
enters into a credit agreement with a retail buyer as provided in
subdivision eleven of this section) shall be subject to all claims
(other than tort claims) and defenses arising out of the buyer's
purchase of goods and services to be paid in accordance with the credit
agreement if (1) the buyer has made a good faith attempt to obtain
satisfactory resolution of a disagreement or problem relative to the
sale from the seller; (2) the amount of the initial transaction exceeds
fifty dollars; and (3) the place where the initial transaction occurred
was in the same state as the mailing address previously provided by the
buyer or was within one hundred miles from such address, except that the
limitations set forth in subparagraphs (2) and (3) of this paragraph
with respect to a buyer's right to assert claims and defenses against
the holder shall not be applicable to any transaction in which the
seller (A) is the same person as the holder; (B) is controlled by the
holder; (C) is under direct or indirect common control with the holder;
(D) is a franchised dealer of the holder's products or services; or (E)
has obtained the order for such sale through a mail solicitation made by
or participated in by the holder in which the buyer is solicited to
enter into such transactions by using the credit agreement with the
holder.
(b) The amount of claims or defenses asserted by the buyer may not
exceed the amount of indebtedness owing to the holder with respect to
such transaction at the time the buyer first notifies the holder or
seller of such claim or defense. For the purpose of determining the
amount of indebtedness owing to the holder in the preceding sentence,
payments and credits to the buyer's account are deemed to have been
applied, in the order indicated, to the payment of (1) service charges
in order of their entry to the account; and (2) debits to the account
other than those set forth above, in the order in which each debit entry
to the account was made.
14. (a) A seller of goods pursuant to the terms of this article shall
adopt and apply procedures to reasonably avoid debiting the buyer's
account with respect to any transaction, or to reasonably avoid selling
or assigning to a financing agency a sales slip or memorandum evidencing
a purchase of goods, prior to the date the goods subject to the
transaction are delivered to the buyer or the buyer's designee. A seller
of goods may debit the buyer's account, or sell or assign to a financing
agency a sales slip or memorandum evidencing a purchase of goods, on or
after the date of sale where:
(i) the goods subject to the transaction are shipped within ten days
of the date of sale and the seller has reason to believe that delivery
will be effected not later than fourteen days from the date of sale; or
(ii) the goods subject to the transaction are one of a kind or are to
be specifically manufactured for the buyer and are not suitable for sale
to others in the ordinary course of the seller's business; or
(iii) the buyer requested delayed delivery of goods that will be
available for delivery not later than fourteen days from the date of
sale; or
(iv) the buyer and seller have agreed that delivery of the goods will
occur at regular intervals or in instalments.
(b) For the purposes of this subdivision, a seller may debit the
buyer's account, or sell or assign to a financing agency a sales slip or
memorandum evidencing a purchase of goods, on or after the date of
shipment where, in the ordinary course of business, delivery is to be
effected no later than ten days after the date of shipment.
(c) It shall not be a violation of this subdivision if the seller
ships or makes the goods available for delivery as agreed and delivery
is delayed due to failure of the buyer to accept said delivery.
(d) The provisions of this subdivision shall not apply to mail order
merchandise as regulated by section three hundred ninety-six-m of the
general business law.
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