A.R.S. tit. 44 ch. 17 — Arizona Revised Statutes Title 44 Chapter 17 — Retail Installment Sales Transactions

44-6001. Definitions In this chapter, unless the context otherwise requires: 1. "Cash sale price" means the price stated in a retail installment contract or other memorandum furnished by a retail seller to a retail buyer in connection with a retail charge account agreement, for which the seller would have sold and the buyer would have bought the goods or services which are the subject matter of a retail installment transaction, if the sale had been a sale for cash. The cash sale price may include any taxes and charges for delivery, installation, servicing, repairs, alterations or improvements. 2. "Finance charge" means the amount payable by the buyer for the privilege of purchasing goods or services under a retail installment transaction. It does not include the amount, if any, charged for insurance premiums, delinquency charges, attorneys' fees, court costs or official fees. 3. "Goods" means all tangible chattels, except motor vehicles, money, things in action or intangible personal property other than merchandise certificates or coupons as described in this chapter. The term includes chattels which are to be affixed to real property as to become a part of it whether or not severable from it and merchandise certificates or coupons, issued by a retail seller, not redeemable in cash and to be used in the face amount instead of cash for goods or services sold by such seller. 4. "Holder" means: (a) The retail seller of goods or services under a retail installment contract or retail charge account agreement. (b) A person to whom a retail buyer owes an obligation arising from a retail installment transaction, whether directly or by assignment or other transfer. (c) Any person entitled to the rights of a retail seller under a retail installment contract or retail charge account agreement. 5. "Motor vehicle" means any self-propelled device in, upon or by which any person or property is or may be transported or drawn on a public highway, except: (a) Devices which move upon or are guided by a track or travel through the air. (b) The following, if not designed primarily for highway transportation, but which may incidentally be operated on a public highway: (i) Tractors. (ii) Buses. (iii) Trucks. (iv) Power shovels. (v) Road machinery. (vi) Agricultural machinery. 6. "Official fees" means: (a) The amount of the fees prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a retained title, lien or other security interest created by a retail installment transaction. (b) The premium for insurance in lieu of perfecting a security interest to the extent that the premium does not exceed the amount described in subdivision (a) of this paragraph that otherwise would be payable. 7. "Principal balance" means the cash sale price of the goods or services which are the subject matter of a retail installment contract plus any amounts included, if a separate identified charge is made 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. 8. "Retail buyer" or "buyer" means a person who buys goods or services from a retail seller. 9. "Retail charge account agreement" means an arrangement prescribing the terms of retail installment transactions which may be made from time to time in which a retail buyer purchases goods or services and in which a finance charge or delinquency charge may be computed in relation to the buyer's balance in the account. 10. "Retail installment contract" means an arrangement for a retail installment transaction except a retail charge account agreement or memorandum reflecting a sale made pursuant to such agreement. "Retail installment contract" may include a chattel mortgage, a conditional sale contract, any security agreement or any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for the use of the bailed or leased goods a sum substantially equivalent to or in excess of the value of the goods and if it is agreed that the bailee or lessee is bound to or has the option of becoming the owner of the goods for no other or a nominal consideration upon full compliance with the provisions of the bailment or lease. 11. "Retail installment transaction" means any transaction in which a retail buyer purchases goods or services, excluding services purchased in connection with a lease, from a retail seller pursuant to a retail installment contract or a retail charge account agreement and under which the buyer agrees to pay for the goods and services in more than four installments or for which the payment of a finance charge may be required. 12. "Retail seller" or "seller" means a person regularly and principally engaged in the business of selling goods or services to retail buyers. 13. "Services" means work, labor, or services of any kind. 44-6002. Retail installment contracts; retail charge account agreements; definitions A. Under a retail installment contract, other than a retail charge account agreement, a finance charge not to exceed a rate set by contract may be charged and received. The finance charge may be computed either at the single annual percentage rate using the actuarial method or it may be precomputed on the assumption that all payments will be made in the amount and on the dates scheduled. If the finance charge is precomputed, the fact that payments are made either before or after the date due does not affect the amount of finance charge which the seller or holder may charge or receive. If such precomputed contract balance is prepaid in full by cash, a new loan, refinancing or otherwise, the seller or holder shall charge only for the finance charge which has been earned and unpaid late or delinquency charges as of the date of prepayment and the buyer shall receive a rebate of that portion of the precomputed finance charge which is the difference between the total precomputed finance charges and the charges at the contract finance charge rate computed on the unpaid principal balance based on the number of days or months to maturity based on either a thirty day month - three hundred sixty day year or daily three hundred sixty-five or three hundred sixty-six day year on the number of days remaining to maturity. The amount of such rebate shall not be computed pursuant to the method commonly known as the "rule of 78's". To simplify the calculation of earned finance charge, it is permissible to assume that all payments were made as originally scheduled or as otherwise mutually agreed. B. It is permissible to calculate the finance charge on an annual basis of twelve months of thirty days each, or on a daily basis if a day is counted either as 1/360th, 1/365th, or 1/366th of a year, as the purchaser and seller or holder may agree by writing. The seller or holder may also charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount not to exceed five dollars on an installment of twenty-five dollars or less and ten dollars on an installment greater than twenty-five dollars. C. A retail installment contract which otherwise conforms to the requirements of this chapter may contain provisions which relate to additional goods and services authorizing any of the following: 1. The seller may add subsequent purchases made by the buyer to the contract. 2. The total price of the goods or services covered by the contract may be increased by the price of such additional goods or services. 3. The seller may increase proportionately all finance charges and installment payments. 4. All terms and conditions of the contract may apply equally to such additional goods or services. 5. The contract may provide for a consolidation of subsequent purchases with one or more of the previous contracts or may provide for a series of sales transactions made pursuant to an agreement providing for the addition of the principal balance, plus the finance charge for the current sale, to an existing balance. 6. The goods purchased under the previous contract or contracts may be security for the goods purchased under the subsequent contract, but only until such time as the total of payments under the previous contract or contracts is fully paid. D. Under a retail charge account agreement a rate of finance charge not to exceed the maximum rate set by contract may be charged and received on an amount not in excess of the greatest of any of the following: 1. The average daily balance in the account in the billing cycle period. 2. The balance in the account at the beginning of the billing cycle period, after first deducting payments and credits received during the billing cycle period. 3. The median amount within a ten dollar range in which the balance as computed under paragraph 1 or 2 of this subsection falls if the seller applies the same finance charge to all such balances within such range. E. As used in this section, month need not be a calendar month but may, instead, be a regular billing cycle period. If the finance charge for the billing cycle period is less than fifty cents, a minimum finance charge not in excess of fifty cents may be charged for the period. F. The seller or holder may also charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount not to exceed five dollars on an installment of twenty-five dollars or less and ten dollars on an installment greater than twenty-five dollars. As an alternative, if a seller or holder does not charge, collect or receive a finance charge as permitted in this chapter, he is entitled to charge, collect and receive a delinquency charge determined by applying any rate of interest to the delinquent balance if such interest charge is provided for in the retail charge account agreement. G. Notwithstanding the late payment or delinquency charge provided in subsection B or F, in a commercial transaction, the seller or holder may charge a late payment or delinquency charge, in addition to all finance charges permitted, on each installment not paid in full upon the tenth day after its due date in an amount of not more than five per cent of the unpaid balance of the installment. H. A seller or holder who receives a check, draft, negotiable order of withdrawal or similar instrument which is drawn on a bank or other depository institution and which is offered by a buyer in payment of an installment may, if the instrument is not paid or is dishonored by the institution, charge and collect from the buyer a bad check charge in the amount of either ten dollars or the actual charge made to the seller or holder by the depository institution for the return of the unpaid or dishonored instrument, whichever is greater. I. A retail charge account agreement may also provide for the payment of court costs and for reasonable attorneys' fees if it is referred for collection to an attorney other than a salaried employee of the holder of the retail charge account agreement. J. In this section: 1. "Actuarial method" means the method of allocating payments made on a debt between the unpaid principal balance and the finance charge pursuant to which a payment is applied first to the finance charge due and any remainder is subtracted from the unpaid principal balance. 2. "Commercial transaction" means a transaction in which the goods or services are intended by the borrower for use primarily for other than personal, family or household purposes. 44-6004. Assignment or transfers A. The provisions of this section shall apply notwithstanding any law to the contrary. B. An assignee may purchase or acquire any retail installment contract or retail charge account agreement or any outstanding balance under either from a seller or holder on terms, conditions and price as may be mutually agreed upon. C. Notice to the buyer of the assignment and any requirement that the transferor be deprived of dominion over payments upon a retail installment contract or retail charge account agreement or over the goods if returned to or repossessed by the seller or holder, is not necessary to the validity of a written assignment of the retail installment contract or retail charge account agreement or any outstanding balance under either as against creditors, subsequent purchasers, pledgees, mortgagees or lien claimants of the transferor. D. Unless the buyer has notice of the assignment of his retail installment contract, retail charge account agreement or any outstanding balance under either, payment made by the buyer to the holder last known to him is binding upon all subsequent holders. E. A holder may acquire from a retail seller or another holder invoices or other memoranda evidencing retail sales on such terms, conditions and price, discount or other charge as may be mutually agreed upon. Such price, discount or other charge is not a part of the time price differential or delinquency charge permitted. 44-6005. Periodic statements required Except where the seller or holder deems an account pursuant to a retail charge account agreement to be uncollectible or where delinquency collection procedures have been instituted with respect to such an account, the seller or holder of the account shall, within a reasonable time after the end of the periodic billing cycle, mail or deliver to the buyer who is obligated pursuant to the terms of such agreement, for each billing cycle at the end of which there is an outstanding balance in excess of one dollar in that account or with respect to which a finance charge is imposed, a statement or statements which the buyer may retain. A reasonable time after the end of the billing cycle is presumed to be fifteen days. 44-6006. Violation; bar to recovery A seller or holder who violates any provision of this chapter is barred from recovery of any finance charge, official fees and delinquency charge under or in connection with the related retail installment contract or the related retail charge account agreement for as long as the violation continues. This section does not bar the seller or holder from recovery from the buyer of an amount equal to the cash price of the goods or services and the cost to the seller or holder of any insurance included in the transaction.