Florida Statutes 520.34 – Retail installment contracts
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(1)(a) A retail installment contract shall be in writing, shall be signed by both the buyer and the seller, and shall be completed as to all essential provisions prior to the signing of the contract by the buyer.
Terms Used In Florida Statutes 520.34
- Contract: A legal written agreement that becomes binding when signed.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Minimum finance charge: The minimum, or fixed, finance charge that will be imposed during a billing cycle. A minimum finance charge usually applies only when a finance charge is imposed, that is, when you carry over a balance. Source: Federal Reserve
- Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) The printed portion of the contract, other than instructions for completion, shall be in at least 6-point type. The contract shall contain the following notice in substantially this form:
Notice to the Buyer
a. Do not sign this contract before you read it or if it contains any blank spaces.
b. You are entitled to an exact copy of the contract you sign. Keep it to protect your legal rights.
(c) The seller shall deliver to the buyer, or mail to the buyer at his or her address shown on the contract, a copy of the contract signed by the seller. Before the transaction is consummated, a copy of the retail installment contract, or a separate statement by which the disclosures required by this section are made and on which the buyer and seller are identified, shall be delivered to the buyer, except as provided in s. 520.35. Any acknowledgment by the buyer of delivery of a copy of the contract, if contained in the contract, shall appear directly above or adjacent to the buyer’s signature.
(d) The contract shall contain the names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer, and a description of the goods.
(2) The contract shall contain the following:
(a) Amount financed.–The “amount financed,” using that term, and a brief description such as “the amount of credit provided to you or on your behalf.” The amount financed is calculated by:
1. Determining the cash price, and subtracting any down payment;
2. Adding any other amounts that are financed by the creditor and that are not part of the finance charge; and
3. Subtracting any prepaid finance charge.
(b) Finance charge.–The “finance charge,” using that term, and a brief description such as “the dollar amount the credit will cost you.”
(c) Total of payments.–The “total of payments,” using that term, and a descriptive explanation such as “the amount you will have paid when you have made all scheduled payments.”
(d) Total sale price.–In a credit sale, the “total sale price,” using that term, and a descriptive explanation, including the amount of any down payment, such as “the total price of your purchase on credit, including your down payment of $ .” The total sale price is the sum of the cash price, the items described in subparagraph (a)2., and the finance charge disclosed under paragraph (b).
Except for the requirement in subsection (3) that a separate written itemization of the amount financed be provided, a contract which complies with the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq., or any accompanying regulations shall be deemed to comply with the provisions of this subsection and subsection (3). However, in any proceeding to enforce the provisions of this section, the burden of alleging and proving compliance with the federal Truth in Lending Act shall be on the party claiming compliance.
(3) The seller shall provide a separate written itemization of the amount financed, which itemization shall disclose the following:
(a) The cash price;
(b) The amount of down payment;
(c) The difference between the amounts disclosed under paragraphs (a) and (b);
(d) The amounts, if any, included for insurance and other benefits, specifying the types of coverages and benefits; and
(e) Any taxes and official fees not included in the cash price.
The itemization required by this subsection may appear on a disclosure statement separate from all other material, or it may be placed on the same document with the contract or other information so long as it is clearly and conspicuously segregated from everything else on the document.
(4) The maximum number of payments and the amount and date of each payment need not be separately listed if the payments are stated in terms of a series of scheduled amounts and if the amount of the final payment does not exceed the scheduled amount of any preceding installment; in such case, the amount of the scheduled final payment may be stated as the remaining unpaid balance. The initial date for the payment of the first installment may be a calendar date or may refer to the time of delivery or installation.
(5) A retail installment contract need not be contained in a single document. If the contract is contained in more than one document, then one such document may be an original document applicable to purchases of goods or services to be made by the retail buyer from time to time, and in such case such document, together with the sales slip, account book, or other written statement relating to each purchase, shall set forth all of the information required by subsections (1) and (2) and shall constitute the retail installment contract for each such purchase.
(6)(a) Notwithstanding the provisions of any other law, the seller under a retail installment contract may charge, receive, and collect a finance charge which may not exceed the following rates: on the amount financed, $12 per $100 per year. The finance charge under this subsection shall be computed on the amount financed of each transaction, as determined under paragraph (2)(a), on contracts payable in successive monthly payments substantially equal in amount, for the period from the date of the contract to and including the date when the final installment thereunder is payable. When a retail installment contract is payable other than in successive monthly payments substantially equal in amount, the finance charge may be at the effective rates provided in this subsection, having due regard for the schedule of payments. The finance charge may be computed on the basis of a full month for any fractional-month period in excess of 10 days. Notwithstanding the other provisions of this subsection, a minimum finance charge not in excess of the following amounts may be charged on any retail installment contract: $12 on any retail installment contract involving an initial amount financed of $50 or more; $7.50 on a retail installment contract involving an initial amount financed of more than $25 and less than $50; and $5 on a retail installment contract involving an initial amount financed of $25 or less.
(b) The holder of a retail installment contract, upon request by the buyer, may extend the scheduled due date of all or any part of any installment. In the event the unpaid time balance of the contract is extended, the holder may, at his or her election, charge and collect for each 30 days’ extension an amount not to exceed one-twelfth of the maximum allowable rate per annum of the unpaid balance at the time of extension.
(7) No retail installment contract shall be signed by the buyer when it contains blank spaces to be filled in after it has been signed, except that, if delivery of the goods or services is not made at the time of execution of the contract, the identification of the goods or services and the due date of the first installment may be left blank and later inserted by the seller in the seller’s counterpart of the contract after it has been signed by the buyer. The buyer’s written acknowledgment, conforming to the requirements of paragraph (1)(c), of delivery of a copy of a contract shall be presumptive proof, in any action or proceeding, of such delivery and that the contract, when signed, did not contain any blank spaces as herein provided.
(8) The seller under any retail installment contract shall, within 30 days after execution of the contract, deliver or mail or cause to be delivered or mailed to the buyer at his or her aforesaid address any policy or policies of insurance the seller has agreed to purchase in connection therewith, or in lieu thereof a certificate or certificates of such insurance. The amount, if any, included for insurance shall not exceed the applicable premiums chargeable in accordance with the rates filed with the Office of Insurance Regulation of the commission; if any such insurance is canceled, unearned insurance premium refunds and any unearned finance charges thereon received by the holder shall, at his or her option, be credited to the final maturing installments of the contract or paid to the buyer, except to the extent applied toward the payment for similar insurance protecting the interests of the seller and the holder or either of them. The finance charge on the original transaction shall be separately computed:
(a) With the premium for the canceled or adjusted insurance included in the “amount financed”; and
(b) With the premium for the canceled insurance or the amount of the premium adjustment excluded from the “amount financed.”
The difference in the finance charge resulting from these computations shall be the portion of the finance charge attributable to the canceled or adjusted insurance, and the unearned portion thereof shall be determined by the use of the rule of 78ths. “Cancellation of insurance” occurs at such time as the seller or holder receives from the insurance carrier the proper refund of unearned insurance premiums. Nothing in this act shall impair or abrogate the right of a buyer to procure insurance from an agent and company of his or her own selection, as provided by the insurance laws of this state; and nothing contained in this act shall modify, alter, or repeal any of the insurance laws of this state.
(9) If the buyer so requests, the holder shall give or forward to the buyer a receipt for any payment when made in cash. At any time after the execution of a contract, but not later than 2 months after the last payment thereunder, the holder shall, upon written request of the buyer, give or forward to the buyer a written statement of the dates and amounts of payments and the total amount, if any, unpaid thereunder. Such a statement shall be supplied by the holder once without charge; if any additional statement is requested by the buyer, the holder shall supply such statement to the buyer at a charge not exceeding $1 for each additional statement so supplied.
(10) After payment of all sums for which the buyer is obligated under a contract, and upon written demand made by the buyer, the holder shall deliver or mail to the buyer, at his or her last known address, one or more good and sufficient instruments to acknowledge payment in full and shall release all security in the goods.
(11) Notwithstanding the provisions of any retail installment contract to the contrary, any buyer may prepay in full at any time before maturity the unpaid balance of any retail installment contract and in so paying such unpaid balance shall receive a refund credit thereon for such anticipation of payments. The amount of such refund shall represent at least as great a proportion of the finance charge, after first deducting therefrom an acquisition cost of $15, as the sum of the monthly balances beginning 1 month after prepayment is made bears to the sum of all the monthly balances under the schedule of payments in the contract. When the amount of such refund credit is less than $1, no refund need be made.
(12) The seller shall not request or accept a certificate of completion signed by the buyer prior to the actual delivery of the goods and completion of the work to be performed under the contract.
(13) As amended by chapter 79-592, Laws of Florida, chapter 79-274, Laws of Florida, which amended subsection (5):
(a) Shall apply only to loans, advances of credit, or lines of credit made on or subsequent to July 1, 1979, and to loans, advances of credit, or lines of credit made prior to that date if the lender has the legal right to require full payment or to adjust or modify the interest rate, by renewal, assumption, reaffirmation, contract, or otherwise; and
(b) Shall not be construed as diminishing the force and effect of any laws applying to loans, advances of credit, or lines of credit, other than to those mentioned in paragraph (a), completed prior to July 1, 1979.
(14) The seller under a retail installment contract may collect a $10 processing fee for each retail installment contract that is approved and activated. Such processing fee shall not be considered interest or finance charges pursuant to chapter 687.