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Are your collection rights limited by the Ohio RISA?

Among the greatest challenges that come from starting a new business may debt collection. Depending on your industry, you may find yourself in the position of trying to collect from contractors, vendors and even consumers. There's no way you can completely avoid the risk of non-payment, but you can make the collections substantially more difficult if you're not using the right contracts.

If you're in a business that certain sells goods or services to consumers on an installment basis, you need to make sure your contracts comply with the requirements of the Ohio Retail Installment Sales Act, or RISA. The Act is often associated with gym memberships and consumer rent-to-own contracts for furniture or other small goods. RISA applies to range of contracts involving installment payments, however, such as:

  • Home repair services
  • Motor vehicles and mobile homes
  • Health spas
  • Cemetery plots
  • Swimming pools

If your contract doesn't meet the legal requirements under RISA, it may not be enforceable. Although nonpayment can still be addressed in some ways, if you take such a contract to a court seeking a judgment, you could be completely out of luck.

Basically, installment agreements subject to RISA must clearly state:

  • The full cash price of the goods or services being sold
  • The amount of any down payment and the remaining balance
  • The number of installment payments agreed to, their amounts and dates due
  • The allocation of each payment toward finance charges and principal payments
  • The amount and price of any insurance purchased, with a confirmation that the consumer agreed to purchase it

If you're not sure whether your contracts are subject to RISA, or if you're seeking collections help with consumer contracts, someone from our firm would be happy to assist you.

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