Contracts
Sec. 12. (a) This section applies to contracts for prepaid services
or merchandise, or both, entered into under this chapter before
January 1, 1996.
(b) A purchaser may enter into more than one (1) contract under
this chapter for prepaid services or merchandise, or both. Each
contract may be funded with cash, either in a lump sum or
installment payments, or an insurance policy, or both. The purchaser
may revoke the contract if the purchaser sends the seller written
notice of the revocation within thirty (30) days after the contract is
signed by the purchaser and seller. If a purchaser revokes a contract
the seller shall refund to the purchaser, without interest, all property
used to fund the contract. If the seller receives payment of at least
five hundred dollars ($500) in cash that must ultimately be placed in
trust or escrow under this section, the seller shall, not more than five
(5) days after receiving the payment, deposit the payment in escrow
pending irrevocable deposit to trust or escrow authorized by
IC 30-2-10. Thirty (30) days after the contract is signed all property
paid or delivered to the seller to fund each contract shall be
irrevocably deposited by the seller to trust or escrow authorized by
either IC 30-2-10 or IC 23-14-49-1. All property received for services
or merchandise sold by a seller licensed under IC 25-15 shall be
irrevocably deposited to trust in compliance with IC 30-2-10. All
sellers shall guarantee the provision of all services and merchandise
sold under a contract authorized by this chapter.
(c) If a contract under this chapter is funded with an insurance
policy, the ownership of the insurance policy must be irrevocably
assigned to a trustee. The seller may not borrow against, pledge,
withdraw, or impair the cash value of the policy.
(d) A finance charge may be assessed on a contract sold on an
installment basis, and the seller shall disclose to the purchaser all the
applicable requirements under federal and state law.
(e) A seller or successor seller who has accepted cash or an
insurance policy, or both, as full payment of a contract under
subsection (b), is responsible for providing all contracted prepaid
services and merchandise if the insurance company or trust company
used to fund the contract is insolvent.
(f) A purchaser who purchases a contract with cash in a lump sum
or through an insurance contract shall make the payment for the
contract payable only to the seller. A purchaser who purchases a
contract with cash in installments may make payments for the
contract to the seller.
As added by P.L.200-1991, SEC.1. Amended by P.L.1-1992,
SEC.159; P.L.207-1993, SEC.29; P.L.120-1994, SEC.3;
P.L.241-1995, SEC.6; P.L.52-1997, SEC.52.
Last modified: May 27, 2006