97-H 5431
Approved Jul. 3, 1997


It is enacted by the General Assembly as follows

SECTION 1. Title 6 of the general laws entitled "Commercial Law-General Regulatory Provisions" is hereby amended by adding thereto the following chapter:




{ADD 6-28.1-1. Short Title. ADD} {ADDThis act may be cited as the "Unfair Home Improvement Loans for Senior Citizens Act." ADD}

{ADD 6-28.1-2. Definitions. ADD} {ADD (a) "Goods" means tangible chattels bought or leased for use primarily for personal, family, or household purposes, including certificates or coupons exchangeable for these goods, and including goods which, at the time of the sale or subsequently, are to be so affixed to real property as to become a part of real property whether or not severable therefrom.

(b) "Services" means work, labor, and services for other than a commercial or business and including services furnished in connection with the sale or repair of goods.

(c) "Person" means an individual, partnerships, corporation, limited liability company, association, or other group, however organized.

(d) "Consumer" means an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes.

(e) "Transaction" means an agreement between a consumer and any other person, whether or not the agreement is a contract enforceable by action, and includes the making of, and the performance pursuant to, that agreement.

(f) "Senior citizens" means a person who is [sixty-five (65)] years of age or older.

(g) "Disabled person" means any person who has a physical or mental impairment which substantially limits one or more major life activities.

(h) "Home solicitation" means any transaction made at the consumer's primary residence, except those transactions initiated by the consumer. A consumer response to an advertisement is not a home solicitation. ADD}

{ADD 6-28.1-3. Home Solicitation. ADD}{ADD The following unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer are unlawful:

The home solicitation of a consumer who is a senior citizen where a loan is made encumbering the primary residence of that consumer for the purposes of paying for home improvements and where the transaction is part of a pattern or practice in violation of either subsection (h) or (i) of Section 1639 of Title 15 of the United States Code or subsection (e) of Section 226.32 of Title 12 of the Code of Federal Regulations.

A third party shall not be liable under this subdivision unless (1) there was an agency relationship between the party who engaged in home solicitation, the third party or (2) the third party had actual knowledge of, or participated in the unfair or deceptive transaction. A third party who is a holder in due course under a home solicitation transaction shall not be liable under this subdivision. ADD}

{ADD 6-28.1-4 Penalty for violation. -- ADD} {ADDAnyone who violates any provision of this chapter shall be guilty of a misdemeanor; any person, firm, or corporation, which has been found guilty as aforesaid, or any person, firm, or corporation acquiring derivative rights therefrom shall be prohibited from maintaining any civil action for the recovery of any debt created as a result of such violation and shall issue a discharge of any encumberance recorded on the real property securing the debt. ADD}

SECTION 2. This act shall take effect upon passage.

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