(1) With respect to a consumer credit sale, including a sale pursuant to a revolving charge account, a seller may contract for and receive a credit service charge not exceeding that permitted by this section.
(2) The credit service charge, calculated according to the actuarial method, may not exceed the greater of either of the following:
(a) any rate filed and posted pursuant to Section 37-2-305, or
(b) eighteen (18%) percent per year on the unpaid balances of the amount financed.
(3) This section does not limit or restrict the manner of contracting for the credit service charge, whether by way of add-on, discount, or otherwise, so long as the rate of the credit service charge does not exceed that permitted by this section. If the sale is precomputed:
(a) the credit service charge may be calculated on the assumption that all scheduled payments will be made when due, and
(b) the effect of prepayment is governed by the provisions on rebate upon prepayment (Section 37-2-210).
(4) For the purposes of this section, the term of a sale agreement commences with the date the credit is granted or, if goods are delivered or services performed ten days or more after that date, with the date of commencement of delivery or performance. Differences in the lengths of months are disregarded and a day may be counted as one thirtieth of a month. Subject to classifications and differentiations the seller may reasonably establish, a part of a month in excess of fifteen days may be treated as a full month if periods of fifteen days or less are disregarded and that procedure is not consistently used to obtain a greater yield than would otherwise be permitted.
(5) Subject to classifications and differentiations the seller may reasonably establish, he may make the same credit service charge on all amounts financed within a specified range. A credit service charge so made does not violate subsection (2) if
(a) when applied to the median amount with each range, it does not exceed the maximum permitted by subsection (2), and
(b) when applied to the lowest amount within each range, it does not produce a rate of credit service charge exceeding the rate calculated according to paragraph (a) by more than eight percent of the rate calculated according to paragraph (a).
(6) Notwithstanding subsection (2), the seller may contract for and receive a minimum credit service charge of not more than five dollars when the amount financed does not exceed seventy-five dollars, or seven dollars and fifty cents when the amount financed exceeds seventy-five dollars.
(7) Notwithstanding subsection (2), if a seller can demonstrate with competent evidence that: (a) any failure to post rates properly filed under Section 37-2-305 was a result of a bona fide error or excusable neglect; (b) the rates were properly posted when the error or neglect was discovered or brought to the seller's attention; and (c) that no other failure to post rates has been brought to the seller's attention by the Department of Consumer Affairs or by consumers within the previous forty-eight month period, then the maximum rate of credit service charges assessable by the seller is the rate properly filed with the Department of Consumer Affairs, provided, however, the seller that has failed or neglected to post rates is subject to a civil penalty of up to $5,000.00 payable to the Department of Consumer Affairs.
HISTORY: 1962 Code Section 8-800.161; 1974 (58) 2879; 1976 Act No. 686 Section 57; 1982 Act No. 385, Section 14; 1989 Act No. 119, Section 1.