Regulation M is the administrative code that implements the Federal Consumer Leasing Act. Compliance with the advertising requirements of Regulation M satisfies the requirements of the Wisconsin Consumer Act. More information can be found regarding Regulation M and the federal Consumer Leasing Act on the Consumer Financial Protection Bureau website.
Regulation M states that when certain items (so-called triggering terms) are disclosed in a consumer lease ad, they trigger the need to disclose additional information (so-called triggered terms).
The triggering terms are:A. The amount of any payment.
B. A statement of any capitalized cost reduction or other payment required prior to or at consummation, or by delivery, if delivery occurs after consummation.
When a triggering term is used, the following triggered terms must be given*:
A statement that the transaction advertised is a lease.
The total amount due prior to or at consummation or by delivery, if delivery occurs after consummation. (May include or exclude third-party fees such as tax, title, and license fees, but either fact must be disclosed.)
The number of scheduled payments.
The amount of each scheduled payment. (May exclude taxes.)
The due dates or periods (e.g., monthly) of scheduled payments.
Statement of whether or not a security deposit is required.
*One additional triggered term exists for open-end leases that was not listed above because open-end leases generally are not used in Wisconsin due to legal restrictions on lease end liability.
Equal Prominence Rule - The total amount due at signing or delivery, item (2) above, must be at least as prominent as any disclosed component of that amount, such as the down payment or security deposit. An exception exists for the periodic payment.
Clear and Conspicuous Rule - Disclosures must be reasonably understandable. For example, very fine print in a TV ad or very rapidly stated information in a radio ad does not meet the clear and conspicuous standard if consumers cannot read or hear, and cannot comprehend, the information required to be disclosed.
Lease Rate - If a lease rate is disclosed in an ad, it may not be referred to as an "annual percentage rate," "APR," "annual lease rate" or any equivalent term. A lease rate must be accompanied by a notice stating: "This percentage may not measure the overall cost of financing this lease."
TV and Radio Ads - An exception to the general advertising rules exists for television and radio advertisements which permits those ads to disclose less information than print ads, if the ads refer to a toll-free phone number or newspaper ad which disclose all triggered items. However, because the April 1, 1997 revisions streamlined the disclosure requirements, advertisers should find it easier now simply to give all triggered terms in a radio or TV ad.
Example of Permissible Ad:
|Lease a 2012 (make, model) for $1000 at lease signing (including $400 refundable security deposit) and 36 monthly payments of $339 each. Tax, title & license extra.|
Example of Improper Ad:
Ad is improper for three reasons:
Total due at signing is less prominent than "$19 Down."
A statement of whether or not a security deposit is required was not given.
A statement of whether or not amounts disclosed include tax, title and license was not given.
Lease a 2012 (make, model) for $19 Down and $339/month for 36 months*
*$1000 due at lease signing
Phone: (608) 264-7969
Toll-Free: (800) 452-3328 (in Wisconsin)
Fax: (608) 264-7968