NJ Law Regulating Use of Motor Vehicle Payment Devices

MORIARTY, COUGHLIN & MUKHERJI BILL REQUIRING ADVANCE NOTICE PRIOR TO REMOTE DISABLING OF AUTOMOBILES SIGNED INTO LAW

     (TRENTON) – Legislation sponsored by Assembly Democrats Paul Moriarty, Craig Coughlin and Raj Mukherji that would require sufficient warning before a consumer's vehicle is disabled remotely for failure to make a payment was signed into law in 2017.

     The law will requires automobile dealers and lenders to provide a consumer with at least 72 hours-notice before remotely disabling a motor vehicle via a payment assurance device. The law defines a "payment assurance device" as a device, installed pursuant to a consumer's financing agreement or lease agreement on a motor vehicle with GPS capability or starter interrupt capability, that allows for the remote enabling or disabling of the vehicle.

     Presently, New York is considering similar legislation.

     Under the law, only a creditor may install a payment assurance device if the following criteria are met:

     * The installation of a device is accompanied by an enhanced written disclosure acknowledged in writing by the consumer;

     * The consumer is not charged a fee for installation of the device;

     * The consumer receives a warning at least 48 hours before the vehicle is disabled;

     * The device cannot shut down the vehicle while in use; and

     * The consumer has the ability to start a vehicle for a period of 48 hours after it has been disabled.

     Under the law, a violation of the aforementioned provisions would constitute an unlawful practice under the Consumer Fraud Act, punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense.

ASSEMBLY, No. 756

STATE OF NEW JERSEY

217th LEGISLATURE