Sec. 36a-683. (Formerly Sec. 36-407). Failure to disclose.
Sec. 36a-683. (Formerly Sec. 36-407). Failure to disclose. (a) Liability of creditor. Except as otherwise provided in this section, any creditor who fails to comply with
any requirement of sections 36a-675 to 36a-685, inclusive, including Section 125 of the
Consumer Credit Protection Act (15 USC 1635), or of section 36a-771 or 36a-774, with
respect to any person is liable to that person in an amount equal to the sum of (1) any
actual damage sustained by such person as a result of the failure; (2) (A) (i) in the case
of an individual action other than as provided in this subparagraph (A) (ii) and (iii) twice
the amount of any finance charge in connection with the transaction, (ii) in the case of
an individual action relating to a consumer lease under Chapter 5 of the Consumer Credit
Protection Act (15 USC Sections 1667 to 1667E, inclusive) twenty-five per cent of the
total amount of monthly payments under the lease, except that the liability under this
subparagraph (A) (i) or (ii) shall not be less than one hundred dollars nor greater than
one thousand dollars, or (iii) in the case of an individual action related to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not
less than two hundred dollars nor more than two thousand dollars; (B) in the case of a
class action, such amount as the court may allow, except that as to each member of
the class no minimum recovery shall be applicable, and the total recovery under this
subparagraph in any class action or series of class actions arising out of the same failure
to comply by the same creditor shall not be more than the lesser of five hundred thousand
dollars or one per cent of the net worth of the creditor; and (3) in the case of any successful
action to enforce the foregoing liability, or in any action in which a person is determined
to have a right of rescission under Section 125 of the Consumer Credit Protection Act
(15 USC 1635), the costs of the action, together with a reasonable attorney's fee as
determined by the court. In determining the amount of award in any class action, the
court shall consider, among other relevant factors, the amount of any actual damages
awarded, the frequency and persistence of failures of compliance by the creditor, the
resources of the creditor, the number of persons adversely affected, and the extent to
which the creditor's failure of compliance was intentional. In connection with the disclosures referred to in Section 127 of the Consumer Credit Protection Act (15 USC 1637)
a creditor shall have a liability determined under subdivision (2) of this subsection only
for failing to comply with the requirements of Section 125 or 127(a) of said act (15 USC
1635) or (15 USC 1637(a)) or of paragraph (4), (5), (6), (7), (8), (9) or (10) of Section
127(b) of said act (15 USC 1637(b)). In connection with the disclosures referred to in
Section 128 of said act (15 USC 1638) a creditor shall have a liability determined under
subdivision (2) of this subsection only for failing to comply with the requirements of
Section 125 of said act (15 USC 1635) or of paragraph (2), insofar as it requires a
disclosure of the "amount financed", or paragraph (3), (4), (5), (6) or (9) of Section 128
(a) of said act (15 USC 1638(a)). With respect to any failure to make disclosures required
under Chapter 2, 4 or 5 of said act, liability shall be imposed only upon the creditor
required to make disclosure, except as provided in Section 131 of said act (15 USC
1641).
(b) Adjustment of error. A creditor or assignee has no liability under this section
or section 36a-681 or 36a-684 for any failure to comply with any requirement imposed
under sections 36a-675 to 36a-685, inclusive, if within sixty days after discovering an
error, whether pursuant to a final written examination report or notice issued under
subsection (d) of section 36a-684, or through the creditor's or assignee's own procedures, and prior to the institution of an action under this section or the receipt of written
notice of the error from the obligor, the creditor or assignee notifies the person concerned
of the error and makes whatever adjustments in the appropriate account are necessary
to insure that the person will not be required to pay an amount in excess of the charge
actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.
(c) Bona fide errors. A creditor or assignee may not be held liable in any action
brought under this section for a violation of sections 36a-675 to 36a-685, inclusive, if
the creditor or assignee shows by a preponderance of evidence that the violation was
not intentional and resulted from a bona fide error notwithstanding the maintenance of
procedures reasonably adapted to avoid any such error. Examples of a bona fide error
include, but are not limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's
obligations under said sections is not a bona fide error.
(d) Multiple obligors. When there are multiple obligors in a consumer credit transaction or consumer lease, there shall be no more than one recovery of damages under
subdivision (2) of subsection (a) of this section for a violation of sections 36a-675 to
36a-685, inclusive.
(e) Time limit for bringing action. Any action under this section shall be brought
in any court of competent jurisdiction within one year from the date of the occurrence
of the violation. This subsection does not bar a person from asserting a violation of
sections 36a-675 to 36a-685, inclusive, in an action to collect the debt which was brought
more than one year from the date of the occurrence of the violation as a matter of defense
by recoupment or set-off in such action.
(f) Good faith conformance. No provision of this section, subsection (d) of section
36a-684 or section 36a-681 imposing any liability shall apply to any act done or omitted
in good faith in conformity with any provision of sections 36a-675 to 36a-685, inclusive,
or with any rule, regulation, approval or formal interpretation thereof by the commissioner, or in conformity with the Consumer Credit Protection Act (15 USC 1601 et seq.),
including any rule or regulation adopted by the Federal Reserve Board pursuant to said
act, or in conformity with any interpretation of said act by the Federal Reserve Board
or in conformity with any interpretation or approval by an official or employee of the
Federal Reserve System duly authorized by the Federal Reserve Board to issue such
interpretations or approvals under such procedures as said board may prescribe therefor,
notwithstanding that after such act or omission has occurred, such statute, rule, regulation, approval or interpretation is amended, rescinded or determined by judicial or other
authority to be invalid for any reason.
(g) Multiple failure to disclose. The multiple failure to disclose to any person any
information required under sections 36a-675 to 36a-685, inclusive, to be disclosed in
connection with a single account under an open-end consumer credit plan, other single
consumer credit sale, consumer loan, other extension of consumer credit or consumer
lease, shall entitle the person to a single recovery under this section but continued failure
to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection does not bar any remedy permitted by subsection (j) of this section.
(h) Offsets. A person may not take any action to offset any amount for which a
creditor or assignee is potentially liable to such person under subdivision (2) of subsection (a) of this section against any amount owed by such person, unless the amount of
the creditor's or assignee's liability under sections 36a-675 to 36a-685, inclusive, has
been determined by judgment of a court of competent jurisdiction in an action to which
such person was a party. This subsection does not bar a consumer then in default on the
obligation from asserting a violation of said sections as an original action, or as a defense
or counterclaim to an action to collect amounts owed by the consumer brought by a
person liable under said sections.
(i) Duplicate recovery prohibited. Notwithstanding any other provision of sections 36a-675 to 36a-685, inclusive, (1) no person shall be entitled in any action to a
recovery under this section for the failure to disclose any information required under
said sections if a recovery is awarded in the same action under Section 130 of the Consumer Credit Protection Act (15 USC 1640) for the failure to disclose any information
required under said sections; and (2) no person shall be entitled in any action brought
under this section to a recovery if, prior to an award in any such action, a recovery has
been awarded to such person in any action brought under Section 130 of the Consumer
Credit Protection Act (15 USC 1640) in which the same act or omission was the basis
of that action.
(j) Rescission. (1) When an obligor exercises his right to rescind under Section
125 of the Consumer Credit Protection Act (15 USC 1635), he is not liable for any
finance or other charge, and any security interest given by the obligor, including any
such interest arising by operation of law, becomes void upon such a rescission. Within
twenty days after receipt of a notice of rescission, the creditor shall return to the obligor
any money or property given as earnest money, down payment or otherwise, and shall
take any action necessary or appropriate to reflect the termination of any security interest
created under the transaction. If the creditor has delivered any property to the obligor,
the obligor may retain possession of it. Upon the performance of the creditor's obligations under this subsection and Section 125 of the Consumer Credit Protection Act (15
USC 1635), the obligor shall tender the property to the creditor, except that if return of
the property in kind would be impracticable or inequitable, the obligor shall tender its
reasonable value. Tender shall be made at the location of the property or at the residence
of the obligor, at the option of the obligor. If the creditor does not take possession of
the property within twenty days after tender by the obligor, ownership of the property
vests in the obligor without obligation on his part to pay for it. The procedures described
by this subdivision shall apply except when otherwise ordered by a court.
(2) Notwithstanding any rule of evidence, written acknowledgment of receipt of
any disclosures required under sections 36a-675 to 36a-685, inclusive, by a person to
whom information, forms and a statement is required to be given pursuant to this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), does no
more than create a rebuttable presumption of delivery thereof.
(3) An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs earlier,
notwithstanding the fact that the information and forms required under this section and
Section 125 of the Consumer Credit Protection Act (15 USC 1635), or any other disclosures required under sections 36a-675 to 36a-685, inclusive, have not been delivered
to the obligor, except that if (A) the commissioner institutes a proceeding to enforce the
provisions of this section, or Section 125 of the Consumer Credit Protection Act (15
USC 1635), made a part of said sections as provided in section 36a-678, within three
years after the date of consummation of the transaction, (B) the commissioner finds a
violation of this subsection or Section 125 of the Consumer Credit Protection Act (15
USC 1635), and (C) the obligor's right to rescind is based in whole or in part on any
matter involved in such proceeding, then the obligor's right of rescission shall expire
three years after the date of consummation of the transaction or upon the earlier sale of the
property, or upon the expiration of one year following the conclusion of the proceeding or
any judicial review or period for judicial review thereof, whichever is later.
(4) (A) In any credit transaction in which an obligor has the right to rescind under
Section 125 of the Consumer Credit Protection Act (15 USC 1635), and the obligor
does not exercise that right, a finance charge may not begin to accrue in connection with
such transaction until after midnight of the third business day following the consummation of the transaction. (B) Any obligor required to pay a finance charge, in violation
of the provisions of this subdivision, may recover from the creditor twice the amount
of such finance charge, costs and reasonable attorney's fees.
(5) In any action in which it is determined that a creditor has violated subdivision
(1), (2) or (3) of this subsection, in addition to rescission the court may award relief
under other subsections of this section for violations of sections 36a-675 to 36a-685,
inclusive, not relating to the right to rescind.
(6) An obligor shall have no rescission rights arising solely from the form of written
notice used by the creditor to inform the obligor of the rights of the obligor under this
subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635), if
the creditor provided the obligor the appropriate form of written notice published and
adopted by the Federal Reserve Board, or a comparable written notice of the rights of
the obligor, that was properly completed by the creditor, and otherwise complied with
all other requirements of this subsection and Section 125 of the Consumer Credit Protection Act (15 USC 1635) regarding notice.
(7) Notwithstanding the provisions of subsection (n) of this section, and subject to
the time period provided in subdivision (3) of this subsection, an obligor shall have the
rescission rights in foreclosure set forth in Subsection (i) of Section 125 of the Consumer
Credit Protection Act (15 USC 1635(i)). This subdivision shall apply to all consumer
credit transactions in existence or consummated on or after September 30, 1995.
(k) Action against assignee. (1) Except as otherwise specifically provided in sections 36a-675 to 36a-685, inclusive, any civil action for a violation of said sections or
proceeding by the commissioner which may be brought against a creditor, other than
with respect to a consumer credit transaction secured by real property, may be maintained against any assignee of that creditor only if the violation for which such action
or proceeding is brought is apparent on the face of the disclosure statement, except
where the assignment was involuntary. For the purpose of this subdivision, a violation
apparent on the face of the disclosure statement includes, but is not limited to, (A) a
disclosure which can be determined to be incomplete or inaccurate from the face of the
disclosure statement or other documents assigned, or (B) a disclosure not made in the
terms required to be used by said sections.
(2) Except as provided in subdivision (2) of subsection (j) of this section, in any
action or proceeding by or against any subsequent assignee of the original creditor
without knowledge to the contrary by the assignee when he acquires the obligation,
written acknowledgment of receipt by a person to whom a statement is required to be
given pursuant to sections 36a-675 to 36a-685, inclusive, shall be conclusive proof of
the delivery thereof and, except as provided in subdivision (1) of this subsection, of
compliance with Chapter 2 of the Consumer Credit Protection Act. This subsection does
not affect the rights of the obligor in any action against the original creditor.
(3) Any consumer who has the right to rescind a transaction under subsection (j)
of this section or Section 125 of the Consumer Credit Protection Act (15 USC 1635)
may rescind the transaction as against any assignee of the obligation.
(4) (A) Except as otherwise specifically provided in sections 36a-675 to 36a-685,
inclusive, any civil action against a creditor for a violation of said sections and any
proceeding brought by the commissioner against a creditor, with respect to a consumer
credit transaction secured by real property, may be maintained against any assignee of
such creditor only if (i) the violation for which such action or proceeding was brought
is apparent on the face of the disclosure statement provided in connection with such
transaction pursuant to sections 36a-675 to 36a-685, inclusive, and the Consumer Credit
Protection Act (15 USC 1601 et seq.), and (ii) the assignment to the assignee was voluntary. (B) For purposes of this subdivision, a violation is "apparent on the face of the
disclosure statement" if (i) the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount
financed, the note, or any other disclosure of disbursement, or (ii) the disclosure statement does not use the terms or format required to be used by sections 36a-675 to 36a-685, inclusive, and the Consumer Credit Protection Act (15 USC 1601 et seq.).
(5) A servicer of a consumer obligation arising from a consumer credit transaction
shall be treated as an assignee of such obligation to the extent provided in Subsection
(f) of Section 131 of the Consumer Credit Protection Act (15 USC 1641(f)). This subdivision applies to all consumer credit transactions in existence or consummated on or after
September 30, 1995.
(l) Liability of credit card issuer. (1) Subject to the limitation contained in subdivision (2) of this subsection, a card issuer who has issued a credit card to a cardholder
pursuant to an open-end consumer credit plan shall be subject to all claims, other than
tort claims, and defenses arising out of any transaction in which the credit card is used
as a method of payment or extension of credit if (A) the obligor has made a good faith
attempt to obtain satisfactory resolution of a disagreement or problem relative to the
transaction from the person honoring the credit card; (B) the amount of the transaction
exceeds fifty dollars; and (C) the transaction took place wholly within this state, provided
the mailing address previously provided by the cardholder was within this state and
provided the state of billing of the transaction shall not be considered in determining
where the transaction took place, or the transaction took place within one hundred miles
from the mailing address within this state previously provided by the cardholder, except
that the limitations set forth in subparagraphs (B) and (C) of this subdivision with respect
to an obligor's right to assert claims and defenses against a card issuer shall not be
applicable to any transaction in which the person honoring the credit card (i) is the same
person as the card issuer, (ii) is controlled by the card issuer, (iii) is under direct or
indirect common control with the card issuer, (iv) is a franchised dealer in the card
issuer's products or services, or (v) has obtained the order for such transaction through
a mail solicitation made by or participated in by the card issuer in which the cardholder
is solicited to enter into such transaction by using the credit card issued by the card
issuer.
(2) The amount of claims or defenses asserted by the cardholder may not exceed
the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim
or defense. For the purpose of determining the amount of credit outstanding in this
subdivision, payments and credits to the cardholder's account are deemed to have been
applied, in the order indicated, to the payment of: (A) Late charges in the order of their
entry to the account; (B) finance charges in order of their entry to the account; and (C)
debits to the account other than those set forth in subparagraphs (A) and (B) of this
subdivision, in the order in which each debit entry to the account was made.
(m) Liability of lessor. (1) For the purpose of this subsection, the term "creditor"
in this section shall include a lessor.
(2) Any lessor who fails to comply with any requirement imposed under Section
182 or 183 of the Consumer Credit Protection Act (15 USC 1667a or 1667b) with respect
to any person is liable to such person as provided in this section.
(3) Any lessor who fails to comply with any requirement imposed under Section
184 of the Consumer Credit Protection Act (15 USC 1667c) with respect to any person
who suffers actual damage from the violation is liable to such person as provided in this
section.
(n) Limitations on rights of creditors, assignees and consumers. In the case of
any consumer credit transaction subject to the provisions of sections 36a-675 to 36a-685, inclusive, that is consummated before September 30, 1995, the civil, administrative
and criminal liability of a creditor or any assignee of a creditor under sections 36a-675
to 36a-685, inclusive, and a consumer's extended rescission rights under subdivision
(3) of subsection (j) of this section, shall be limited to the extent provided in and subject
to the exceptions contained in Section 139 of the Consumer Credit Protection Act (15
USC 1649).
(1969, P.A. 454, S. 15; P.A. 75-55; 75-436, S. 6, 7; P.A. 77-315, S. 1; P.A. 81-158, S. 8, 17; P.A. 82-18, S. 2, 4; P.A.
87-65; P.A. 88-65, S. 45; P.A. 96-40, S. 1, 2; 96-109, S. 14; 96-180, S. 119, 166.)
History: P.A. 75-55 required that action be brought within three years, rather than one year, in Subsec. (e); P.A. 75-436 rewrote Subsec. (a) to distinguish between class actions and individual actions, returned time for bringing action to
one year in Subsec. (e) and added Subsecs. (f) to (j); P.A. 77-315 specified applicability in Subsec. (a) to failure to comply
with requirements of chapter 657a, this chapter and previously listed sections rather than to failure to disclose information
required under this chapter and listed sections; P.A. 81-158 inserted new Subsecs. (i) to (m) and made extensive changes
to the existing Subsecs. to make the provisions of the section conform to federal law, effective March 31, 1982; P.A. 82-18 changed effective date of P.A. 81-158 from March 31, 1982, to "the effective date of Title VI of Public Law 96-221,
as contained in Section 625(a) of Public Law 96-221, as amended", i.e. October 1, 1982; P.A. 87-65 aded Subsec. (j)(4)
re the accrual of finance charges during the rescission period; P.A. 88-65 made technical changes by adding U.S. code
citations; Sec. 36-407 transferred to Sec. 36a-683 in 1995; P.A. 96-40 made technical changes, and made specific changes
to conform with the federal Truth in Lending Act by amending Subsecs. (a) and (k) re consumer credit secured by real
property, adding Subdivs. (j)(6) and (7) re obligor rescission rights, adding Subdivs. (k)(4) and (5) re assignments, and
adding Subsec. (n) re consumer rescission rights and re liability of creditors and assignees for transactions before September
30, 1995, effective May 2, 1996; P.A. 96-109 and 96-180 both substituted "36a-675 to 36a-685" for "36a-665 to 36a-675"
where appearing and substituted references to Subsec. (d) for Subsec. (g) of Sec. 36a-684, effective June 3, 1996.
Annotations to former section 36-407:
Cited. 183 C. 85.
Cited. 3 CA 201.
One-year limitation for bringing action under state truth-in-lending act is not bar to common law defense of recoupment.
33 CS 201.
Subsec. (a):
Subdiv. (2)(A) cited. 35 CS 508; 36 CS 629, 630; 37 CS 606.
Subsec. (e):
Statute of limitations does not bar defendant's counterclaim by way of recoupment. 35 CS 508.
Subsec. (f):
Cited. 37 CS 606.