There is no federal law in the United States that specifically governs layaway transactions. However, you should be aware of two federal laws—the Federal Trade Commission Act and the Truth in Lending Act— that could affect your layaway plan. In addition, you should be aware that layaway practices could be affected by state or local laws.
Federal Laws
The Federal Trade Commission Act prohibits unfair or deceptive acts or practices in or affecting commerce. Failure to disclose important terms of your layaway plan under certain circumstances may violate the Act. The information contained in this booklet should enable you to avoid such potential violations.
Your layaway plan may be covered by the Truth in Lending Act if you require your customers to agree in writing to make all payments until an item is paid in full. If you do not bind your customer in writing to complete the layaway purchase, then the Truth in Lending Act does not apply.
State and Local Laws
Some state and local laws specifically apply to layaway purchases. These laws vary widely in what they require. In addition, most states have general consumer protection laws that may apply to layaways.
Read on to learn more on writing a layaway policy.
