16a-5-201.   (UCCC) Effect of violations on rights of parties.(1) If a creditor has violated the provisions of this act applying tocollection of excess charges or enforcement of rights (subsection (4) ofsection 16a-1-201), restrictions on interests in land as security(section 16a-2-307), limitations on the schedule of payments or loanterms for supervised loans (section 16a-2-308), attorney's fees (section16a-2-507), security in sales and leases (section 16a-3-301),assignments of earnings (section 16a-3-305), authorizations to confessjudgment (section 16a-3-306), certain negotiable instruments prohibited(section 16a-3-307), assignees subject to defenses (section 16a-3-404),credit card issuer subject to defenses (section 16a-3-403), orlimitations on default charges (section 16a-3-402), the consumer has acause of action to recover actual damages and in addition a right in anaction other than a class action to recover from the person violatingsuch provisions of this act a penalty in an amount determined by thecourt not less than $100 nor more than $1,000. With respect to violations arising fromsalesor loans made pursuant to open end credit, no action pursuant to thissubsection may be brought more than two years after the violationsoccurred. With respect to violations arising from other consumertransactions, no action pursuant to this subsection may be brought morethan one year after the due date of the last scheduled payment of theagreement.

      (2)   If a creditor has violated the provisions of this act applyingto authority to make supervised loans (section 16a-2-301), the loan isvoid and the consumer is not obligated to pay either the amount financedor finance charge. If the consumer has paid any part of the amountfinanced or ofthe finance charge, the consumer has a right to recover the paymentfrom theperson violating this act or from an assignee of that person's rightswho undertakes direct collection of payments or enforcement of rightsarising from the debt. With respect to violations arising from loansmade pursuant to open end credit, no action pursuant to this subsectionmay be brought more than two years after the violation occurred. Withrespect to violations arising from other loans, no action pursuant tothis subsection may be brought more than one year after the due date ofthe last scheduled payment of the agreement pursuant to which the chargewas paid. Persons subject to the penalties in this subsection shall notinclude attorneys or collection agencies who do not purchase a consumerobligation.

      (3)   A consumer is not obligated to pay a charge in excess of thatallowed by this act, and if the consumer has paid an excess charge the consumer has a rightto a refund of twice the excess charge. A refund may be made by reducingthe consumer's obligation by twice the amount of the excess charge. Ifthe consumer has paid an amount in excess of the lawful obligation underthe agreement, the consumer may recover twice the excess amount from theperson who made the excess charge or from an assignee of that person'srights who undertakes direct collection of payments from or enforcementof rights against debtors arising from the debt. Persons subject to thepenalties in this subsection shall not include attorneys or collectionagencies who do not purchase a consumer obligation.

      (4)   If a creditor has contracted for or received a charge in excessof that allowed by this act, or if a consumer is entitled to a refundand a person liable to the consumer refuses to make a refund within areasonable time after demand, the consumer may recover from the creditoror the person liable in an action other than a class action a penalty inan amount determined by the court not less than $100 or more than $1,000.With respect toexcess charges arising from sales or loans made pursuant to open endcredit, no action pursuant to this subsection may be brought more thantwo years after the time the excess charge was made. With respect toexcess charges arising from other consumer credit transactions no actionpursuant to this subsection may be brought more than one year after thedue date of the last scheduled payment of the agreement pursuant towhich the charge was made. Persons subject to the penalties in thissubsection shall not include attorneys or collection agencies who do notpurchase a consumer obligation.

      (5)   Except as otherwise provided, no violation of the provisions ofK.S.A. 16a-1-101 through 16a-9-102, and amendments thereto, impairsrights on a debt.

      (6)   A creditor has no liability for a penalty under subsection (1)or subsection (4) if within 15 days after discovering anerror, and prior to the institution of an action under this section orthe receipt of written notice of the error, the creditor notifies theperson concerned of the error and corrects the error. If the violationconsists of a prohibited agreement, giving the consumer a corrected copyof the writing containing the error is sufficient notification andcorrection. If the violation consists of an excess charge, correctionshall be made by an adjustment or refund.

      (7)   If the creditor establishes by a preponderance of evidence thata violation is unintentional or the result of a bona fide error of lawor fact notwithstanding the maintenance of procedures reasonably adaptedto avoid any such violation or error, no liability is imposed undersubsections (1), (2), and (3), the validity of the transaction is notaffected, and no liability is imposed under subsection (4) except forrefusal to make a refund.

      (8)   In an action in which it is found that a creditor has violatedany provision of K.S.A. 16a-1-101 through 16a-9-102, and amendmentsthereto, the court shall awardto the consumer the costs of the actionand to the consumer's attorneys their reasonable fees. Reasonableattorney's feesshall be determined by the value of the time reasonably expended by theattorney and not by the amount of the recovery on behalf of theconsumer.

      (9)   A creditor who in good faith complies with a written administrativeinterpretation shall not be subject to any penalties under this section for anyact done or omitted in conformity with such written administrativeinterpretation.

      History:   L. 1973, ch. 85, § 89;L. 1992, ch. 80, § 2; July 1.