McGhee, J.,

delivered the opinion of the court.

This is a suit brought in chancery by the appellees, Mrs. D. 0. Ainsworth and her son Willard Ainsworth, for an accounting and to recover all sums of money paid in connection with the purchase of' a used automobile, upon the theory that the difference between what the car could have been purchased from the dealer for in cash and the amount which the purchaser had to pay for'the same on credit amounted to more than 20% interest per annum, and was therefore usurious, provided the amount which the dealer and the finance company term a “time price differential (including finance, insurance, and recording charge, if any),” was in reality for the most part a charge of interest on the deferred balance after the cash down payment had' been made. :

The suit is against the appellant Stanley Yeager, and also E. J. Hare, who were formerly, doing, business as Hines Motor Sales, as seller of the automobile, and the Friendly Finance Company, Inc., as purchaser of the deferred payment noté and conditional sale contract; respectively. The appeal is from a decree against the seller for all sums paid for the car, including a cash payment of $205 made by check, and an overpayment of $138 alleged to have been made in cash at the, time of the purchase of the car, aside from the sums mentioned, in. the note and conditional sale contract, in alleged violation of the regulation of the Office of Price Administration under the Emergency Price Control Act of' Co'ngréss of, 1.942, 50 U. S. C. A. Appendix,.901 et seq., and for which' said sum of $138, or rather treble the; amount thereof and *755attorneys fees, a suit was pending in the Federal Court on behalf of the Administrator of the Office of Price Administration at the time the instant case was heard in the trial court; and the said decree is also against the Friendly Finance Company for all sums paid to it under the note and conditional sale contract purchased from the seller by the said Finance Company, it having been shown that at the time of the trial the Ainsworths had paid all sums agreed to he paid by them in connection with the purchase of the car in question.

The decree appealed from is predicated upon the finding of the chancellor that all sums paid as the difference between what the seller and the finance company alleged to be the cash price of the car under the conditional sale contract and the total amount paid thereunder was in reality an interest charge, less the sum of $36.25 paid out by the finance company on the day of the sale of the car, and included in the finance (or carrying) charge, for the cost of an insurance policy thereon for its protection, and for the benifit of the purchasers, although such difference is designated in the conditional sale contract as “time price differential (including finance, insurance and recording charges, if any)” amounting to the sum of $151.20, and therefore in excess of 20% per annum on the deferred balance, if considered as interest.

The conditional sale contract provides, among other things, as follows:

“The undersigned seller hereby sells, and the undersigned purchaser (s) jointly and severally hereby purchase (s), for the time price and subject to the terms and conditions hereinafter set forth, the following property, delivery and acceptance of which in good order and in its present condition, after thorough examination, is hereby acknowledged by purchaser, viz:

*756“ (Here is set forth the automobile and equipment sold.)

Cash Price

Bona Fide Cash Purchase. or Delivered Price (including any Sales Taxes) . $616.00

Accessories and Extra Equipment (Including any Sales Taxes) Itemized . $.

Service, installation

and handling.$.

(Any Additional Cost) $.

Total Cash Price _$616.00 (A)

Time Price Cash on or Before De-

livery .$206.00

Trade in: Article ...

Year .

Make .

Model .$-

Total Down Payment $205.00(B) Deferred Balance (Subtract B from A) ■.$411.00(0)

Time Price Differential (including finance, insurance and recording charges, if

any) .$151.20 (D)

Time Balance (Add C and D) .$662.20;

which Time Balance, evidenced by note of even date herewith, is payable to order of seller in 15 instalment (s) of $37.48 each, followed by-instalment (s) of $-, each, the first instalment commencing February 19, 1946, and the remaining instalments becoming due monthly on the same day of each successive month thereafter; with interest on instalments after maturity at 6% per annum, and the undersigned agreeing to pay a reasonable attorney’s fee (not less than 15% of any unpaid balance) for collection and/or enforcement of this contract and note. The total of the above Time Balance and Total Down Payment is the Total Price of the above described article; . . .”

We are not unmindful of the well-settled rule that when a case involves the question of whether or not usury has been contracted for or received, it is permissible to introduce parol testimony to show that the written contract does not in fact represent the real agreement between the parties thereto on the issue of whether the sums mentioned therin include interest in excess of the rate allowed by law, and that the question involved in such a case is whether or not a payment of interest is contracted for or *757received, in accordance with the intention of the parties, in excess of the maximum rate provided for by law, and in such manner as to evade the law against usury and for that purpose.

In the instant case, the question is therefore whether the buyer understood that the seller had a cash price and a time or credit price for the sale of the car, and elected to buy at the time or credit price, such practice not being violative of the law against usury, even though the difference, if considered as interest, amounts to more than the rate of interest allowed by law, as held in the cases of Bass v. Patterson, 68 Miss. 310, 8 So. 849, 24 Am. St. Rep. 279; Benson v. Berry-Dampeer Company, 158 Miss. 237, 130 So. 157, 158; Commercial Credit Company, Inc. v. Shelton, 139 Miss. 132, 104 So. 75; Commercial Credit Company, Inc. v. Tarwater, 215 Ala. 123, 110 So. 39, 48 A L. R. 1437, and other cases to be hereinafter cited; or whether the $151.20 referred to in the conditional sale contract as a “time price differential (including finance, insurance, and recording charges, if any), ’ ’ was in reality, and according to the intention of the parties under all the testimony, an amount added to the deferred balance as an interest charge (except as to the cost of the insurance policy, there being no claim that any recording • charges were incurred), and would therefore not represent a part of a time or credit price.

The oral testimony disclosed that while only Mrs. Ains-worth signed the conditional sale contract and note, the purchase of the car was made for the benefit of her son, the appellee Willard Ainsworth, and that they -both read and understood the terms of the contract as written before he asked his mother to sign the same, although he testified that the only price that had been mentioned at all to him by the seller was the sum of $700 instead of the $616 specified in the contract hereinbefore set forth. Th'e appellee, Mrs. Ainsworth, testified that when she signed' the contract she understood in what amount she was obligating *758herself to pay and that she did not pay any more thereon than she expected to pay. And Willard Ainsworth was asked: “You knew you were to pay a credit price for it; that you were not able to pay cash for it, didn’t you?” And he answered: “Yes.” However, he further testified that there “was only one price on the car $700, plus interest.” He was then asked “Who told you that was interest?” he answered “It was interest.” Q. “Who told you that Mr. Ainsworth?” and he'answered “It was carrying charges on the car. ’ ’ This witness did not contend in his testimony that anyone ever told him that the amount to be paid as a time price differential was being-charged as interest, and when he was asked ‘ ‘ What is the difference between carrying charges and interest?” he answered “It all amounts to the same thing.” Nor did his mother Mrs. Ainsworth testify that the word “interest” was mentioned during the negotiations.

As heretofore stated, the question then is whether the time price differential mentioned in the conditional sale contract to cover finance (or carrying) charge, insurance, etc., was a charge for interest and the cost of insurance instead of being a part of the time price specified in the contract and charged to cover the risk to be assumed by the finance company on account of the anticipated rapid depreciation in the value of the automobile by reason of its continued use, the expense of investigating the credit risk assumed by the finance company and the possible expense to be incurred in the seizure and sale of the automobile to enforce the lien thereon for the balance due on the purchase price where the finance company had paid to the dealer the full sum of $616 specified in the conditional sale contract as the cash purchase price therefor.

The appellant, Stanley Yeager, and his co-defendant, ft. J. Hare, averred in their answer that the $616 “was the only charge and the actual charge made by them for the automobile which was sold-to Mrs. Ainsworth . . v’ ’ And, to sustain the decree appealed from, much is made by *759appellees of the testimony of-Yeager along the same line of this averment of their pleading when he says on the witness stand that he sold the car for $616, and that the excess charged under contract covered the carrying charge and insurance, that is to say, he testified that “we added-an additional $151.20 for carrying • charges, time price.” In- other words, the witness said in effect that whether he sold for the timé price or for cash, he would, in either instance, receive in cash $616, either from the finance company if sold for a time price or from the purchaser of the car if the latter should pay the purchase price in cash. When asked what he meant when he said that he set the price of .the car at $616, he explained that “I mean aman could come in and'pay that much cash for it. He could not buy it on credit for that.” He was asked if he ever said that this amount was the time sale price, and he answered “No.”

Nor do we think that the testimony of the appellees is sufficient to warrant a finding' that they did not fully understand that the car- would cost them more if purchased- on time than it would if'bought for cash, that is to say, that there was a cash and a time price. In this enlightened age almost everyone interested in the purchase of an automobile from a regular dealer knows that the difference between what a' car can be bought for cash and on time is more, if' considered as interest, than any rate authorized by law, and that when the purchase is on time a credit price is charged in order that the deferred balance may be discounted to some finance company on such' a basis as to enable the dealer to collect for himself the cash price agreed upon. The dealer does not usually intend to collect any interest, but rather to- get the cash price from a finance company and let the latter assume the risk incident to the long time credit price plan of payment, depreciation of 'the security, insurance costs, etc.

And, all of the proof shows without dispute that' the finance company had to agree to the credit price mentioned in the conditional sale contract before the trans*760action was closed and the contract executed, as a condition precedent to its agreement to buy the paper at a discount in the amount of the difference between tbe cash price fixed by the dealer and the total amount to be paid on time as a credit price. The contract itself, which was admittedly read by the Ainsworths before it was executed, fully informed the purchasers that the car was being sold at the time price, a term several times mentioned therein, if they did not already know. Moreover, they did not testify that they were told specifically that the car would cost them the same if bought for cash as it would on time, and the proof is overwhelming, when considered as a whole, that they knew that the $151.20 time price differential represented the difference between the cash and credit price.

In the case of Bass v. Patterson, 68 Miss. 310, 8 So. 849, 24 Am. St. Rep. 279, the Court announced the rule that a seller may charge a credit price much larger than his cash price and that in such event the difference is not interest; also that the question of whether or not there was both a cash price and a credit price is a question of fact. In the case of Benson v. Berry-Dampeer Company, 158 Miss. 237, 130 So. 157, 158, an instruction which was upheld on appeal seems to have clearly recognized that the issue to be properly submitted to the jury was whether or not the merchant had charged the customer a credit price for the merchandise on Ms account, and then added a 10% carrying charge to such credit price, or whether or not the carrying charge had been merely added to the cash price to make up the difference between the same and the credit price. And, in the case of Commercial Credit Company v. Shelton, 139 Miss. 132, 104 So. 75, where it was claimed by the'finance company that there was both a cash and credit price agreed upon, the contract showed therein that the specific sum of $1,435 was mentioned as the cash price, and also that another specific sum of $1,543 was mentioned as a total credit price of the car involved, and the proof offered on the question of usury there disclosed that the difference of *761$108 represented, as shown by the opinion of the Conrt ■in that case, a “service charge inclnding interest, insurance and handling charges,” and that these charges “bring the total cost to buyer to $1,543.” In other words, the fact that the $108 added to the cash price was made up of the above mentioned items did- not prevent it from being a part of the credit price. That is the issue in the case at bar as to the $151.20 charge that was added to the cash price of $616. And, we are of the opinion that the testimony of the several witnesses, including that of the witnesses introduced by the appellees, when considered as a whole in connection with the provisions of the contract hereinbefore set forth, clearly established that the $151.20 was added to the cash price to cover the risks hereinbefore mentioned, incident to a sale of rapidly depreciating personal property, and the cost of insurance, etc. and not as a charge of interest in violation of the law against usury.

In the case of Crabb v. Comer, 190 Miss. 289, 200 So. 133, 135, hereinbefore cited, and where the question of usury was involved, the Court said that “When a transaction is upon all its real facts capable of two reasonable constructions, by one of which it will be legal and valid, while by the other it will be unlawful and usurious, the court will adopt the former of the alternatives”; and we think that a careful consideration of the testimony of all of the witnesses, when considered as a whole, as heretofore stated, clearly reveals that the case of Commercial Credit Company v. Shelton, supra, is both applicable and controlling here in view of the fact that while in that case the cash price and the total credit price were definitely stated in two. separate and distinct amounts, there was involved nevertheless the question of whether or not the difference between the two, although spcifically designated as a “service charge including interest, insurance and handling charges” was in fact intended to be a part of the credit price, instead of a usurious charge of interest. The Court held in the affirm*762ative, and..we are of.the opinion that it was manifest error to hold otherwise in the case at bar under all of the facts and circumstances of this case.

Where one brings suit under the usury statute, Section 36, Code 1942, its provisions are to be strictly construed against the parties seeking to invoke it and the proof of usury must be clear, positive and certain; or, as said in the case of Byrd v. Link-Newcomb Mill & Lumber Co., 118 Miss. 179, 79 So. 100, 101, “the statute . . . can be . . . invoked only where it is clear and certain . . . that the usurious interest was either contracted for or received”; or as further held in the case of Morgan v. King, 128 Miss. 401, 91 So. 30, the law “which provides for the forfeiture of both principal and interest if more than 20 per cent, per annum is charged, is highly penal, and must be strictly construed. ’ ’

. In Volume 66 C. J., page 183, the rule is announced that: “A vendor may fix upon his property one price for cash and another for credit, and the mere fact that the credit price exceeds the cost price by a greater percentage than is permitted by the usury laws is a matter of concern to the parties but not -to the courts, .barring evidence of. bad faith. If the parties have acted .in good faith, such a transaction is not a loan, and not usurious. This rule is particularly applicable where the article sold is subject to depreciation; in value, as, for instance, an automobile.” To the same effect see 55 Am. Jur. 338.

In Volume 55 Am. Jur., .page 340, appears Section 23 of that text in the following language:

“Finance Charge in Conditional Sales Contract; Ex-tention of Refinancing of Payments. — -Although there- is a limited amount of authority to the contrary, it is generally held that where a contract of conditional sale is bona fide, a finance or other similar charge in excess of the highest lawful rate of interest included therein as a part of the ‘time’ or credit price is not-usurious. In many of the cases • holding this view the courts have applied the principal that a bona fide conditional sale *763upon a deferred payment basis does- not involve a loan of money or the forbearance of a debt; and in almost all tbe cases tlie decisions have been predicated, at least in part, upon the principal that the finance charge is merely part of an increased purchase price. . . .”

In 143 A. L. R. 242, the annotation on this question states: “It is well settled that where the contract of conditional sale is bona fide and the finance charge or other similar charge is included therein as a part of the total ‘time’ or credit price of the chattle which the purchaser thereby agrees to pay upon a deferred payment basis, the finance charge does not constitute usury, even though such charge, if considered as interest, would be in excess of the highest lawful interest upon the cash purchase price for the time payment thereof is deferred upon the contract, provided of course that the transaction was what it purported to be and not in fact a loan.”

The suit of Wilson v. J. E. French Co., 214 Cal. 188, 4 P. (2d) 537, is a case where, upon purchasing an automobile the cash price of which was $1,195, the purchaser executed a conditional sale contract calling for deferred payments over a period of eighteen months under which the total cost to the purchaser was $1,532.46, the dealer arriving at such gross price by adding to the cash price the excess above shown, and included in which there was an item of $186.51 as a carrying charge. It was held, in an action by the purchaser, that the amount of this carrying charge did not render the transaction usurious, the Court saying: ‘ ‘ That such an item, whatever it may be called, is not usury in a bona fide conditional sales contract is now well settled. . . . The essence of the situation is that the transaction is not a loan. . . . The cash price and the term sale price may logically differ. In an automobile transaction, where the article sold is depreciating, it is perfectly legitimate, if not necessary, that a rather wide margin exist between the cash price, and the term price, especially where the down *764payment is small and the possession of tlie car is given to the purchaser.”

See also the cases of Commercial Credit Company v. Tarwater, 215 Ala. 123, 110 So. 39, 48 A. L. R. 1437; Dunn v. Midland Loan Finance Corp., 206 Minn. 550, 289 N. W. 411; Cheairs v. McDermott Motor Company, 175 Ark. 1126, 2 S. W. (2d) 1111; Zazzaro v. Colonial Acceptance Corporation, 117 Conn. 251, 167 A. 734; Bonetti v. United Beauty Supply, Sup., 31 N. Y. S. (2d) 463; General Motors Acceptance Corporation v. Weinrich, 218 Mo. App. 68, 262 S. W. 425; and Rattan v. Commercial Credit Company, Tex. Civ. App., 131 S. W. (2d) 399, which latter case is one holding not usurious the sale of an automobile on a time credit price where the dealer employed a calculation table promulgated by the finance company to which the purchase paper was assigned, as was done in the case at bar, and which table showed that the credit price was determined by adding to the regular cash price of the automobile an insurance charge of $86 and $100 carrying charges, or credit privileges; and where it was held that if the transaction in fact involved a loan, the added charges would exceed the legal rate of interest, and it was then held that no loan was involved, and that inasmuch as the transaction was simply a sale for credit at a higher price than for cash, calculated on a known basis for the seller to realize the cash price of the automobile by a subsequent sale of the credit balance paper through commercial channels, no usury was involved.

The appellees rely strongly upon the case of Seebold v. Eustermann, 216 Minn. 566, 13 N. W. (2d) 739, 741, 152 A. L. R. 585, wherein the defendants claimed that there was no usurious interest contracted for since “there was 'no lending of money involved in their dealings with this plaintiff, ’ ’ and that the transaction constituted “merely a sale of personal property and not a loan of money, ’ ’ but it is shown in that case that the seller of the truck testified that when he delivered the same to the *765purchaser he told hirri that “we would finance it for him. I quoted him the price . . . and that the interest for 24 month was $142.16. That (with the cost of insurance) made up the total that went into the contract.” (Italics ours.) And, the Court said that this was a candid admission to that effect that “said sum of $142.16 was added ... as interest upon said deferred-payments, and for no other purpose.” It is evident that the admission above referred to was the basis of the Court’s decision in holding that the contract was usurious, even though it recited that the truck was being purchased on a ‘ ‘ time price basis. ’ ’ The case is therefore distinguishable from the case at bar in that there is no specific testimony in the present case to show that the finance or carrying charge which went into the time price differential was stated by anyone during the negotiations leading up to the execution of the written contract to be an interest charge, instead of the difference between the cash and the time price specifically mentioned in the contract. The Seebold case, however, reaffirmed the general rule announced in case of Dunn v. Midland Loan Finance Corporation, supra, that “A sale of personal property is not a loan or. forbearance of money and is not within the usury law, unless the sale is a mere form or device-to evade the usury law. . . . The increase of the credit price for the purpose of the conditional sale contract does not convert what otherwise would be a sale into a loan. . . . Courts have observed that in calculating the addition to the cash price the owner may consider all factors which influence vendors, such as profit, return on investment, overhead, handling charges, risks involved,, insurance, sale discount of contract for deferred payments and perhaps other items. ’ ’

Most assuredly, the purchase of a conditional sale contract and note for the deferred balance of the cash price of an automobile of rapidly depreciating value would not be considered a good banking proposition at a return *766of only the legal rate of interest per annum on the investment, where it is necessary in so many instances to look primarily to the security as a means of enforcing payment.

But, on the question as to whether there must he a loan or a forbearance of credit by the seller before the usury laws can become applicable, it seems that under the wording of our usury statute, Section 36, Code of 1942, the foregoing decisions from other jurisdictions may not be necessarily applicable or controlling, since it was held by this Court in the case of Kennedy et al. v. Porter et al., 176 Miss. 742, 743, 170 So. 286, which involved the statutory right of a building and loan association to legally’ charge 10% on what it claimed was a loan, that an interest charge was usurious on the purchase price of the property, where an actual bona fide sale alone was involved, the Court saying that an answer which alleged that the transaction did not involve a loan, but the ordinary purchase price of property, had stated a good defense, and held that if the averment to that effect was true the contract was usurious. In that case, however, the Court was required to adopt a strict construction against the building and loan association for the reason that it was claiming an exemption from the general statute against usury.

On the contrary, the statute involved in the instant case must be strictly construed, as a highly penal statute, against the debtor who claims that usury lias been charged, instead of against the creditor as in the Kennedy case.

But, be that as it may, we are of the opinion that the excess amount charged and collected over and above the cash price for the automobile in question here represented the difference between the cash and the credit price, and that under the other decisions of this Court hereinbefore discussed the contract was not' usurious; that as to whether there was a cash payment of $138 made by the purchaser in addition to the O. P. A. ceiling price of $616 is a matter over which the Federal Court had first acquired jurisdiction, and with which we are not con*767cerned here under onr usury statute, since it was neither interest nor.á sum of money taken.into consideration in computing the time price differential here involved; and that the decree of the trial court should be reversed and judgment rendered here for the appellants.

Reversed and judgment here for the appellants.

Mr. Justice Orr

delivered the opinion of the court:

An appeal was granted to the Appellate Court for the First District from a judgment obtained in the municipal court of Chicago in favor of the State Street Furniture Company, appellee, (herein called plaintiff,) against Armour & Co., appellant, (herein called defendant,) for a sum found due on an assignment of wages given to plaintiff by one of defendant’s employees. The Appellate Court affirmed the judgment, and, because of the importance of the questions involved, issued a certificate of importance allowing an appeal to this court as provided by section 121 of the Practice act.

As a defense to the action brought by the plaintiff under its wage assignment the defendant filed an affidavit of merits, which, among other things, recited that the employee whose wages were involved had prior to the date of the assignment entered into a written contract with defendant as follows: “For and in consideration of my employment by Armour & Co. or any of its subsidiaries, I do hereby covenant and agree, as a part of my contract of employment, that I will not sell, transfer, set over or assign in any manner to any person or persons, co-partnership or corporation, any right to or claim for wages or salary, in whole or in part, due me or to become due me from Armour & Co., or any of its subsidiaries, under the said contract of employment without the consent in writing of Armour & Co.; that any right or claim I now have or may have to salary or wages, as aforesaid, shall not be assignable without the written consent of Armour & Co., and that any at*162tempted sale, transfer or assignment without such written consent shall be null and void.” Prior to the date of the assignment the defendant had given written notice to numerous firms, including the plaintiff, that it had entered into such a contract with all of its employees and would no longer honor wage assignments. It was therefore the contention of the defendant that because of such contract and notice the subsequent assignment of wages without its consent was null and void. On motion of the plaintiff the trial court struck the defendant’s affidavit of merits because it failed to set forth any legal defense to the statement of claim. The defendant elected to stand on its affidavit of merits, and upon its refusal to plead further a default was entered against it, followed by an assessment of damages and judgment.

The principal question presented is whether the affidavit of merits filed by the defendant stated a legal defense to the plaintiff’s claim. In other words, by reason of the employment contract was the assignment of wages void, since the written consent of the defendant was not obtained thereto ? The determination of this question is of great importance to all mercantile firms which sell goods on the installment plan.

The right of an employee to make an assignment of his wages has long been recognized in this State, and the privilege of using and contracting for the disposal of wages is both a liberty and a property right. (Massie v. Cessna, 239 Ill. 352; Off & Co. v. Morehead, 235 id. 40; Western Theological Seminary v. City of Uvanston, 325 id. 511.) “Property” includes every interest in any and everything subject to the ownership of man, and the right to dispose of that interest is a property right. (Bailey v. People, 190 Ill. 28.) The relationship between employer and employee with respect to unpaid wages is that of debtor and creditor, and the right of the employee to those wages is a chose in action and as such may be assigned. (Monarch Discount *163Co. v. Chesapeake and Ohio Railway Co. 285 Ill. 233.) This court has not only held that assignments of wages may be enforced as to past services, but has also sanctioned such assignments as to wages to be earned in the future under an existing employment if such assignment is made for a valuable consideration and untainted with fraud. Mallin v. Wenham, 209 Ill. 252.

Wage assignments are also expressly recognized and the rights of wage earners sought to be protected by different statutory provisions in this State. (Smith’s Stat. 1929, chap. 32, secs. 351-353, p. 780; chap. 74, sec. 16, p. 1743.) By an act of May 13, 1905, the legislature undertook to prescribe conditions and restrictions upon wage assignments, but this court in Massie v. Cessna, supra, held the act void because it contravened section 2 of article 2 of the constitution of this State, which provides that “no person shall be deprived of life, liberty or property, without due process of law.” It was there held: “The right to labor for and to render services to another, and the right to dispose of the compensation to be received for so doing, are property rights within the meaning of the language just quoted from the constitution. It is at once apparent upon an examination of this statute that it abridges the right of the man who earns a salary and the right of the man who earns wages to contract with reference thereto.” Thus by our statutes and court decisions the general right of an employee to assign his wages as security for a debt has long been recognized in Illinois.

The contract relied upon to defeat the judgment in this case contained no absolute denial of the employee’s right to make an assignment of his wages. It only specified that such wages should not be assigned without the written consent of Armour & Co. and that unless such consent was obtained the assignment should be null and void. It is not necessary to have the consent of an employer to make a valid assignment of wages where the assignment is of the *164entire claim. (2 R. C. L. p. 624.) Section 18 of the Practice act makes no requirement that the debtor shall consent to the assignment before the assignee can bring his action to recover the debt due the assignor, nor is such a requirement to be found in the decisions of this court. (Knight v. Griffey, 161 Ill. 85; Williams v. West Chicago Street Railroad Co. 199 id. 57.) The right of the assignee to institute suit to recover the salary or wages of an employee is the same as that of the employee himself. (Monarch Discount Co. v. Chesapeake and Ohio Railway Co. supra.) The fact that the defendant sent out a circular notifying the plaintiff and others that it would not consent to an assignment of wages given by any of its employees is of no legal effect, as such consent was not necessary to the validity of the assignment. Since the consent of the employer was not necessary to make the assignment valid the withholding of consent cannot make the assignment void, otherwise the power to withhold consent would be the power to destroy valuable property rights, contrary to the doctrine enunciated in Massie v. Cessna, supra.

It is argued at great length by the defendant that the employee may waive his right to make an assignment of his wages unless consented to by the employer and that such contracts between employer and employee should be upheld. On the contrary it is vigorously contended by the plaintiff that such contracts restricting or prohibiting the right of employees to freely assign the fruits of their labor are void as against public policy. The issues in this case do not require the determination of any such questions of public policy. This is a suit by an assignee of wages due from the assignor’s employer. The relationship of the parties to this suit is that of debtor and creditor, since the assignee stands in the shoes of the employee as to the latter’s wages due from the employer. There was no privity of contract between the assignee and the employer. They were relying upon two separate contracts with the employee, to each *165of which one or the other was not a party. The contract of the employee with Armour & Co. not to assign his wages without its consent was not binding upon the assignee, who was not a party to the agreement. After a contract has been fully executed and nothing remains to be done except to pay the money the claim becomes a chose in action, which is assignable and enforceable under section 18 of the Practice act. (Ginsburg v. Bull Dog Auto Fire Ins. Ass’n, 328 Ill. 571.) A violation of an employee’s agreement with his employer may provide ground for the employee’s discharge or other action by the employer but cannot control the disposition of moneys earned under the contract of employment. Bank of Harlem v. City of Bayonne, 48 N. J. Eq. 246, 21 Atl. 478.

The defendant further asserts that a partial assignment of a debt due or to become due cannot be made without the consent of the debtor. But the assignment here is of the entire claim and no question of partial assignment of a debt due or to become due is involved. Where the assignment is of the entire claim the consent of the debtor is not required, as it is of no concern to the defendant in whose name the suit for wages due the employee is instituted. (Williams v. West Chicago Street Railroad Co. supra; Knight v. Griffey, supra.) Where the employer owes the employee for wages earned, the contract of employment has, as to the wages earned, ceased to be a bilateral contract with mutual rights and duties. It has then become a unilateral contract or debt, with an absolute obligation on the part of the employer to pay and an absolute right on the part of the employee to receive his pay. (Ginsburg v. Bull Dog Auto Fire Ins. Ass’n, supra.) When one has incurred a debt, which is property in the hands of the creditor, the debtor cannot restrain its alienation as between the creditor and a third person any more than he can forbid the sale or pledge of other chattels. A debt is property, which may be sold or assigned, subject to the ordinary rules of the *166common law in determining the rights of the assignee, and, when untainted with fraud, its sale offers no ground for complaint by the debtor. Portuguese Bank v. Welles, 242 U. S. 7; Bank of Harlem v. City of Bayonne, supra.

The judgment of the Appellate Court is affirmed.

Judgment affirmed.

Ed. P. McFaddiN, Justice.

This, case involves the issue of usury in connection with a sale.1

Appellant, Clyde Hare, purchased a used truck from Earl Meeks, a second-hand automobile dealer in Arka-delphia, for $1,750. After making a cash payment of $100, and trading in a car for a credit of $500, the balance due by Hare to Meeks was $1,150. To handle this balance, Piare executed to Meeks a title retaining contract and note for $1,439.13. The note and contract were on forms supplied Meeks by appellée, General Contract Purchase Corporation; and Meeks and Hare understood that the said $1,150 was increased $289.14 to take care of insurance, interest and service charges on the delayed payments; and that the note for $1,439.13 was payable $68.53 per month for twenty-one months.

A day or two after the completion of the trade between Meeks and Hare, Meeks transferred the title retaining contract and note to the General Contract Purchase Corporation, without recourse, and received $1,150. Hare made sis of the monthly payments to General Contract Purchase Corporation, and then filed suit alleging usury, and claiming the relief stated in § 68-609 et seq. Ark. Stats. The General Contract Purchase Corporation, for its defense, claimed:

I. That General Contract Purchase Corporation was a bona fide purchaser, for value, without notice, and was, therefore, a holder in due course of the Hare note, and that the claim of usury was unavailable against such holder.

*603II. That the contract price of the truck was increased from $1,750 for a cash sale, to $2,039.13, because it was a credit sale.

III. That the difference between the face of the note ($1,439.13) and the balance of the truck trade ($1,150) represented two items: one being $148.24, which was the amount of insurance premium, and the other being $140.89, which was not only for interest but for service charge; and that such service charge has been approved by this Court.

The Chancery Court refused Hare’s plea of usury, and entered a decree for General Contract Purchase Corporation; and from that decree, Hare has appealed. We discuss the defenses of General Contract Purchase Corporation in the order listed.

I. Bona Fide Holder. This defense is Avithout merit. If the note be in fact usurious, then transferring it to a bona fide purchaser would not improve the situation. Our'Constitution (Art. 19, § 13) provides:

“All contracts for a greater rate of interest than ten per cent per annum shall be void, as to principal and interest, and the General Assembly shall prohibit the s$me by law; . . .”

In the case of German Bank v. DeShon, 41 Ark. 331, this Court held that a note usurious in the hands of the payee is also usurious in the hands of a subsequent purchaser, though he purchased in good faith, before maturity of the note, and without any notice of the usury; and that the reason for such holding is that the Constitution makes a usurious note void, and therefore, it can gain no validity by circulation. The case of German Bank v. DeShon is an outstanding decision in our reports, and has been consistently followed. Under that we now defense of bona fide holder, for value, without notice, is without merit against the plea of usury.

II. Increased Selling Brice Because of Credit Sale. Appellee says that the price of the truck was increased *604because the truck was sold on credit and appellee claims that there are many cases from this Court,2 and from other jurisdictions,3 which permit a “credit price”, as distinguished from a cash price. The cases cited by appellee sustain the general theory, but even the credit price may be attacked as a cloak for usury.4

But the facts in tbe case at bar disclose that there was never any “credit price” actually stated. We have before us the original Conditional Sales Contract between Hare and Meeks, and it recites:

“Total cash price of automobile and all extra equipment .$1750.00

Cash on or before delivery .....$100.00

Total down payment. 600.00

Time Price Differential (Including any Insurance), . 289.13

Which said balance of time price is payable in 21 consecutive equal monthly installments of $68.53 each.”

On the reverse side of the original contract, there is the assignment from Meeks to General Contract Purchase Corporation and also an affidavit, duly acknowledged by Hare and Meeks, which, > omitting signatures and acknowledgment, reads:

“The undersigned Purchaser and Seller of the within motor vehicle hereby swear and affirm that the *605within Conditional Sales Contract is bona fide, given to secure an unpaid just debt of $1150.00 due from Purchaser to Seller . . .”

From the foregoing, and from other evidence in the record, it is clearly established that the truck was priced at $1,750, and that there was no “credit price”, as distinguished from the $1,750. There is no fact in this record which makes applicable the rule of a bona fide credit price. Therefore, we need not discuss credit price as a cloak for usury any further than is discussed in the subsequent topics of this opinion.

III. Interest and Service Charge. Thus, we come to appellee’s final defense, which, as previously stated, is that the $140.89 was not only for interest, but for a service charge in connection Avith the sale of the truck. The balance on the truck was $1,150, and the insurance premium was $148.24, so the debt was $1,298.24. But the note was for $1,439.13. The question is whether such interest and service charge, which when added together exceed 10%,5 make the transaction usurious. It is clear:

*606(a) that Hare and Meeks agreed that $289.13 would be added to the $1,150, in order to cover insurance, interest, and carrying charges; (b) that the parties thought the $289.13 listed as “time price differential (including any insurance)”, was a perfectly legal addition, and; (c) that it was not until months after the trade was made and after Hare claimed usury, that it was ascertained that the insurance premium was $148.24, and the interest and other charges were $140.89.

The evidence fails to show that Meeks acted as the agent of G-eneral Contract Purchase Corporation in this case, so there was a sale by Meeks to Hare, and the transfer of the note and papers by Meeks to General Contract Purchase Corporation. The question is whether such “time price differential” is legally permissible against the plea of usury even when there is a sale on which to predicate such increased price.

In a long line of cases, we have permitted the seller, under one guise or another, to do exactly what was done in the case at bar, and we have permitted the transferee of the paper to recover in just such a situation. Some of such cases are: Garst v. General Contract Purchase Corp., 211 Ark. 526, 201 S. W. 2d 757; Harper v. Futrell, 204 Ark. 822, 164 S. W. 2d 995, 143 A. L. R. 235; General Contract Purchase Corp. v. Holland, 196 Ark. 675, 119 S. W. 2d 535; Cheairs v. McDermott Motor Co., 175 Ark. 1126, 2 S. W. 2d 1111; Standard Motors v. Mitchell, 173 Ark. 875, 298 S. W. 1026, 57 A. L. R. 877; and Smith v. Kaufman, 145 Ark. 548, 224 S. W. 978.

In the case at bar, the parties dealt on the strength of the aforesaid holdings, which have become a rule of property, and we must not overrule these cases retroactively.*607

IY. Caveat. But the time has come ivhen we must reexamine these holdings, so we now give the public a caveat7 that the effect of transactions, such as in the case at bar, may impinge on the constitutional mandate against usury, and transactions entered into after this appeal becomes final, may be subjected to the taint of usury with the aforementioned decisions affording no protection. Illustrative of our earlier holdings in this regard, we call attention to two cases. In Ford v. Hancock, 36 Ark. 248, there had been a credit sale of chattels, with a note and mortgage to secure the seller. The buyer pleaded usury in the sale, and that plea was successful. This Court said:

‘ ‘ It is not usury for one who sells a piece of property on credit, to contract for a higher price than he would have sold it at for cash. If the intention be, in fact, to sell on credit, he has the right to fix a price greater than the cash price, with legal interest added; but if the sale be really made on a cash estimate, and time be given to pay the same, and an amount is assumed to be paid greater than the cash price, with legal interest, would amount to, this is an agreement for forbearance that is usurious. Therefore, where the intention is not apparent, it is a question for the jury to determine, whether it was a bona fide credit sale, or a device to cover usury. Tyler on Usury, 92.”

Likewise, in Tillar v. Cleveland, 47 Ark. 287, 1 S. W. 516, the Court used pertinent language. Cleveland sought to borrow $270 from Tillar in order to buy some *608property. But Tillar insisted on taking title to the property and then selling it to Cleveland for $360. This Court held that Tillar had used the deed and contract of sale to accomplish usury; and the language of Chief Justice Marshall was quoted with approval:

“Yet it is apparent that if giving this form to the contract will afford a cover which conceals it from judicial investigation, the statute would become a dead letter. Courts, therefore, perceived the necessity for disregarding the form, and examining into the real nature, of the transaction. If that be in fact a loan, no shift or device will protect it”

The way the Finance Company operated in the case at bar is in many respects similar to the way Tillar operated in the reported case. Our cases disclose that finance companies have seized upon the “credit price rule” as a means of obtaining more than a 10% return upon what is in form a sale, but is in substance, a loan,. It is obvious that if a prospective purchaser of a car, radio, refrigerator, etc., should borrow $1,000 directly from a finance company, then buy the article with the money and execute a one-year note to the finance company for $1,200, such transaction would be usurious. But the finance companies are accomplishing the same result by having dealers in cars, radios, refrigerators, etc., handle the sale in the first instance, and under the guise of a credit price, add an excessive charge which inures to the finance company, because the dealer is reasonably confident in advance of the sale that he can transfer the papers to the finance, company for his own cash price. Thus, the finance company is getting the benefit of the increase. Nor is the increase purely for credit risk, because the car, radio, refrigerator, etc., is usually insured against normal hazards.

The result is that, by the simple expedient of providing forms and a rating book to the seller, and buying the conditional sales contract and note from him, the finance companies are receiving a usurious rate of interest. We cannot permit the constitutional mandate *609

*610What we are trying to do is, to keep the spirit of the constitutional mandate against usury ¿breast of present day commercial transactions. We give this caveat prospectively, so as not to entrench on property rights acquired by reason of our previous opinions, and this caveat applies to all transactions entered into after this opinion becomes final.

The Chief Justice concurs in part and dissents in part.

Justice LONG

delivered the opinion of the Court.

On this appeal, we have been asked to determine whether rent-to-own contracts are subject to certain consumer protection statutes. Specifically, the parties question whether the Retail Installment Sales Act (“RISA”), N.J.S.A. 17:16C-1 to -61; the interest rate cap in the criminal usury statute, N.J.S.A. 2C:21-19; and the Consumer Fraud Act (“CFA”), N.J.S.A. 56:8-1 to -135, apply to such arrangements. The trial judge answered those questions in the negative and the Appellate Division affirmed. Having concluded, based on the plain language of the relevant statutes and established principles of statutory interpretation, that Rent-A-Center’s rent-to-own contracts are subject to each of the denominated acts, we now reverse.

I

The rent-to-own industry, in its present iteration, is generally traced back to a “retail appliance store owner whose customers were being denied credit to purchase washers and dryers.” Susan Lorde Martin & Nancy White Huckins, Consumer Advocates vs. the Rent-to-Own Industry: Reaching a Reasonable Accomodation, 34 Am. Bus. L.J. 385, 385 (1997). Today, rent-to-own is a multi-billion dollar business that consists of

dealers that rent furniture, appliances, home electronics, and jewelry to consumers. Consumers enter into a self-renewing weekly or monthly lease for the rented merchandise, and are under no obligation to continue payments beyond the current weekly or monthly period. At the end of each period, the consumer can continue to rent by paying for an additional period, or can return the merchandise. The lease provides the option to purchase the goods, either by continuing to pay rent for a specified period of time, usually 12 to 24 months, or by early payment of some specified proportion, usually 50 to 60 percent, of the remaining lease payments.

Rent-to-own transactions offer immediate access to household goods for a relatively low weekly or monthly payment, typically without any down payment or credit check. These terms are attractive to many consumers who cannot afford a *194cash purchase, may be unable to qualify for credit, and are unwilling or unable to wait until they can save for a purchase.

[Federal Trade Commission, Bureau of Economics Staff Report: Survey of Rent-to-Own Customers 1-2 (April 2000)(footnotes omitted)(hereinafter FTC Report).]

Generally, rent-to-own customers engage in such transactions in order to possess consumer goods that they need and cannot obtain through ordinary means. Price Waterhouse LLC, THORN Americas—New Jersey Customer Survey Report III—17 (November 19, 1996)(hereinafter Price Waterhouse Survey )(Rent-A-Center survey showing over 72% of New Jersey Rent-A-Center customers could not afford to purchase item at traditional retail store); Kathleen E. Keest et al., Interest Rate Regulation Developments: High-Cost Mortgages, Rent-to-Own Transactions, and Unconscionability, 50 Bus. Law. 1081, 1086 (1995)(“Rent-to-own agreements are typically entered into by customers who can neither afford to purchase the merchandise outright nor obtain credit.”). Indeed, nationally, rent-to-own customers are more likely to be “African American, younger, less educated, have lower incomes, have children in the household, rent their residence, live in the South, and live in non-suburban areas.” FTC Report, supra, at ES-1.

Although some consumers enter into rent-to-own transactions to fill a temporary need or to try a product out before buying it, id. at 2, the vast majority are the working poor whose incomes are on the margin of economic stability; they engage in rent-to-own for ownership purposes. Id. at ES-2 (“Sixty-seven percent of customers intended to purchase the merchandise when they began the rent-to-own transaction.”); Lynn Drysdale & Kathleen E. Keest, The Two-Tiered Consumer Financial Services Marketplace: The Fringe Banking System and its Challenge to Current Thinking About the Role of Usury in Today’s Society, 51 S.C. L.Rev. 589, 635-36 (2000); see also Price Waterhouse Survey, supra, at III-17. In fact, studies, including those by Rent-A-Center, have concluded that between 64% and 70% of all rent-to-own merchandise is ultimately purchased by the customers. FTC Report, supra, at ES-1; Patrick A. Gaughan, Ph.D. & Henry L. Fuentes, *195C.P.A., An Analysis of the Product Offerings of Rent-A-Center, Inc. Perez et al. v. Rent-A-Center, Inc. 8 (Oct. 3, 2003).

Rent-A-Center is the nation’s largest rent-to-own company, Gaughan, supra, at 4, with approximately fifty stores in New Jersey alone. Id. at 9-10. Between March 2001 and May 2002, Plaintiff, Hilda Perez, entered into five rent-to-own contracts with Rent-A-Center in order to become the owner of used furniture, a used washer and new dryer, a used DVD player and television, a new computer, and a used large screen television and cabinet. Perez v. Rent-A-Center, Inc., 375 N.J.Super. 63, 70, 866 A.2d 1000 (App.Div.2005). Those transactions were documented by the Appellate Division as follows:

washer/dryec big-screen Tv & cabinet

[Id. at 70, 866 A.2d 1000.]

The contract for the washer and dryer is representative of all others. It states:

*196THIS IS A RENTAL AGREEMENT ONLY

This is a rental agreement only. You will not acquire any equity in the property by making rental payments. You have not agreed to purchase this property, and will not acquire any ownership rights in it unless you have, at your option, paid the total of rental payments plus the option payment necessary to acquire ownership.

4. OWNERSHIP: We own the property you are renting. You will not acquire any ownership rights in the property unless you have, at your option, paid the total of payments plus the purchase option price necessary to acquire ownership as set forth below, or exercise the early purchase option described below. If you want to purchase this or similar property now, you may be able to get cash or credit terms from other sources which will result in a lower total cost than the rental payments, plus the purchase option price provided for below.

OPTION TO PURCHASE: If you renew this Agreement for 95.3 successive weeks, you will pay a total of $1,820.33 or if you renew this Agreement for 44.0 successive semi-months, you will pay a total of $1,793.07 or if you renew this Agreement for 22.0 successive months, you will pay a total of $1,671.12 and you will have the option to purchase the property for its then fair market value. For purpose of this option, this price will not exceed $164.57. Thus, in order to acquire ownership of this item, you must pay the total amount of $1,984.90 if you pay weekly rental payments, or $1,957.64 if you pay semi-monthly rental payments, or $1,835.69 if you pay monthly rental payments. Figures do not include tax. COST OF RENTAL WITH OPTION TO PURCHASE: The difference between the amount of the cash price and the total amount of all the rental payments under this agreement is $997.43 if you pay weekly, or $970.17 if you pay semi-monthly, or $848.22 if you pay monthly, which includes the option to purchase price described above. Figures do not include tax.

5. OUR CASH PRICE FOR THIS PROPERTY is $987.47. This price may be different from the MSRP or other available retail prices.

6. EARLY PURCHASE OPTION: If you wish to purchase the rental property, you may do so at any time by the payment of 50% of the remaining rental payments calculated at that time, plus 50% of the option to purchase amount described above.

Under the contracts, Perez paid a pre-calculated weekly rental amount, a portion of which defrayed the price of the goods. She could return the goods at any time and stop making payments. However, in order to purchase them, Perez agreed that she would pay an amount equal to or in excess of their value along with a purchase option price. If Perez chose to purchase the rental property early, she was required to pay a prorated portion of the remaining rental payments and option price. Together, all the items Perez rented had a cash price of $9,301.72; however, if she *197paid the weekly rates and the additional option payments, she would assume ownership having expended $18,613.32. The difference between the market value of the goods and their ultimate cost was Rent-A-Center’s interest charge for the privilege of buying the products over time.5 By May 2002, Perez had paid $8,156.72. It was at that point that she stopped paying.

Rent-A-Center thereafter filed a small claims complaint seeking money damages against Perez arising out of her failure to pay for or return the rental items.6 Perez, supra, 375 N.J.Super. at 67, 866 A.2d 1000. In turn, Perez sued Rent-A-Center in the Superior Court, alleging that her rent-to-own contracts violated RISA and the CFA because the contracts imposed an interest rate in excess of the 30% permitted under the criminal usury statute. Id. at 68, 866 A.2d 1000. Rent-A-Center counterclaimed for breach of contract and conversion. Ibid. In 2004, Perez moved for partial summary judgment declaring the applicability of RISA and the usury cap, and Rent-A-Center filed a cross-motion for dismissal of the complaint. Ibid. The trial judge granted the relief sought by Rent-A-Center and dismissed Perez’s complaint in its entirety. Ibid.

Perez appealed arguing (1) that Rent-A-Center was collaterally estopped from defending against the RISA claim;7 (2) that RISA, *198by its plain terms, applies; and (3) that the usury limitations are applicable to Rent-A-Center’s operations. The Appellate Division rejected Perez’s collateral estoppel argument and ruled in favor of Rent-A-Center on the merits. We granted Perez’s petition for certification, 183 N.J. 586, 874 A.2d 1105 (2005), along with the application of Legal Services of New Jersey and National Consumer Law Center et al., to appear as amicus curiae.

II

Perez argues that Rent-A-Center is barred under the doctrine of collateral estoppel from defending against the RISA claim and that RISA and the usury cap are applicable to Rent-A-Center’s contracts. She also contends that the Appellate Division erred in failing to separately address her CFA claim. Amici support Perez’s arguments.

Rent-A-Center counters that because the prior litigation was settled, the doctrine of collateral estoppel does not apply; that its transaction with Perez constitutes a series of short-term leases to which neither RISA nor the usury statute applies; and that if RISA is held to apply, Perez cannot maintain a CFA claim.

III

We turn first to Perez’s procedural claim that Rent-A-Center is barred by the doctrine of collateral estoppel from arguing that its contracts are not governed by RISA. At the heart of that claim is the disposition in Robinson v. Thom Am., Inc., a case involving Rent-A-Center. There, the trial judge ruled on summary judgment that Rent-A-Center’s contracts fit within RISA’s definition of “retail installment contract.” See N.J.S.A. 17:16C-1(b). Rent-A-Center appealed and the execution of the judgment was stayed. During the pendency of the appeal, the ease settled. With the consent of the parties, the Appellate Division dismissed the case without prejudice and remanded it to the trial judge for further proceedings.

*199On remand, the details of the settlement were hammered out. Rent-A-Center consented to pay money damages to plaintiffs and to amend its New Jersey rental agreements to conform to RISA, on the condition that the settlement be construed neither as an admission nor as evidence of wrongdoing. After a hearing pursuant to Rule 4:32-4, final judgment was entered in accordance with the settlement, dismissing plaintiffs claims against Rent-A-Center “in their entirety, with prejudice and without costs to any party.”

Perez argues that the summary judgment order entered in Robinson collaterally estops Rent-A-Center from relitigating the RISA issue. Under New Jersey law

[c]ollateral estoppel applies if the issue decided in the prior action is identical to the one presented in the subsequent action, if the issue was actually litigated—that is, there was a full and fair opportunity to litigate the issue—in the prior action, if there was a final judgment on the merits, if the prior determination was essential to the judgment, and if the party against whom preclusion is asserted was a party, or in privity with a party, to the proceeding.

[Fama v. Yi, 359 N.J.Super. 353, 359, 820 A.2d 65 (App.Div.), certif. denied, 178 N.J. 29, 834 A.2d 403 (2003)(citing Pace v. Kuchinsky, 347 N.J.Super. 202, 215, 789 A.2d 162 (App.Div.2002); Barker v. Brinegar, 346 N.J.Super. 558, 567, 788 A.2d 834 (App.Div.2002)).]

Although issue preclusion may be denied on equitable grounds even when the five elements of collateral estoppel are satisfied, ibid., when they are not satisfied, the inquiry ends. The threshold concern here is whether the summary judgment in Robinson constituted a final judgment on the merits warranting issue preclusion. Rent-A-Center argues, and the Appellate Division agreed, that the summary judgment was effectively, if not explicitly, vacated by the later judgment dismissing plaintiffs claims in accordance with the settlement. The Appellate Division ruled:

Entry of the judgment based upon the court-approved settlement agreement had the effect of superceding the initial “final judgment” on the merits. Whether or not the second final judgment explicitly stated this effect is irrelevant. The parties in settling the matter, and the court in approving the settlement, clearly intended to supercede the initial final judgment, and the court effected that result through entry of the second final judgment.

*200 [Perez, supra, 375 N.J.Super. at 77 n. 10, 866 A.2d 1000.]

Although we agree that collateral estoppel was properly rejected by the trial judge, some additional comments are in order.

It is well-established that the mere happenstance of settlement does not automatically warrant the conclusion that a prior judgment entered in a case has been vacated:

Where mootness results from settlement ... the losing party has voluntarily forfeited his legal remedy by the ordinary processes of appeal or certiorari, thereby surrendering his claim to the equitable remedy of vacatur.... The denial of vacatur is merely one application of the principle that a suitor’s conduct in relation to the matter at hand may disentitle him to the relief he seeks.

... Judicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur.

[U.S. Bancorp. Mortgage Co. v. Bonner Mall P’ship, 513 U.S. 18, 25-26, 115 S.Ct. 386, 392, 130 L.Ed.2d 233, 242-43 (1994) (internal quotations and citations omitted)(emphasis added).]

In other words, the settlement of a case after the entry of judgment does not automatically relieve the party against whom the judgment was entered from its legal effects. In order to assure that that judgment will not be used against it in the future, the losing party should file a vacatur motion.8 Ibid. Obviously, once a vacatur motion is granted, collateral estoppel will not apply, because the requisite judgment on the merits will be lacking. Aetna Cas. & Sur. Co. v. Ply Gem Indus., Inc., 313 N.J.Super. 94, 107, 712 A.2d 717 (Law Div.1997)(holding a vacated judgment has no preclusive effect).

In Robinson, no motion was made to vacate the summary judgment and consequently no vacatur order was entered. Generally, that would end the matter because judicial precedents are *201important to lawyers and judgments ordinarily should not be obliterated by implication. U.S. Bancorp., supra, 513 U.S. at 25-26, 115 S.Ct. at 392, 130 L.Ed.2d at 242-43. However, we agree with the Appellate Division that, despite the absence of an unequivocal vacatur order, the “Final Order and Judgment” entered upon the settlement in Robinson was intended to supercede the earlier partial summary judgment.

Indeed, the settlement order specifically references the summary judgment yet declares: “[T]his is a Final Order and Judgment for purposes of appeal.” The order goes on to state that if “the Settlement is not consummated for any reason whatsoever, then the Final Order and Judgment shall be null and void ab initio, and of no force or effect, and that the matter shall be returned to the Appellate Division for continued pursuit of the appeal.” That provision in turn, reflects ¶ 53 of the stipulation of settlement, which prescribes that in the event that the settlement is nullified, “the Robinson case shall stand in the same position, without prejudice, as if [the] stipulation had not been made or filed with the Court.” The fair implication of that language is that the earlier summary judgment was to be considered void if the settlement stood but revived if it failed.

Most importantly, the settlement order states in ¶ 21:

This Order and Judgment and the Stipulation of Settlement and all papers related to them are not, and shall not be construed to be, an admission by any of the Defendants of any liability or wrongdoing whatsoever, and, shall not be offered as evidence of any such liability or wrongdoing in this or any future proceeding.

In other words, the parties agreed that the settlement itself would not be used against Rent-A-Center either as an admission or by way of collateral estoppel. In the face of that language, it seems clear that they had no expectation that the earlier summary judgment would survive and continue to trigger issue preclusion. To be sure, the better course would have been for Rent-A-Center to move to vacate the earlier judgment. Nevertheless, we are satisfied that the settlement order was intended by the parties and the judge who approved it to operate to vacate the earlier summary judgment. In short, we hold that Renb-A-Center is not *202collaterally estopped from defending against the RISA claim Perez has leveled against it.

IV

We turn next to the merits and address the question of whether the rent-to-own contracts between Rent-A-Center and Perez are “retail installment contract[s]” within the meaning of RISA. N.J.S.A. 17:16C-1(b). We begin with that issue because, although RISA itself does not expressly contain an interest rate cap, Perez argues that it is the vehicle through which the Legislature imposed the 30% cap in the criminal usury statute9 on retail installment sales.

A.

Historically, the law treated the taking of interest in connection with the sale of goods as entirely different from the taking of interest on a loan of money per se. Indeed, in the nineteenth and early twentieth centuries, courts first distinguished between the two kinds of loans and decided that the latter required regulation but the former did not. Beete v. Bidgood, 7 B. & C. 453, 108 Eng. Rep. 792 (K.B.1827) (usury laws inapplicable to higher purchase price charged in exchange for buyer’s ability to pay purchase price in installments over time); Hogg v. Ruffner, 1 Black 115, 66 U.S. 115, 118-19, 17 L.Ed. 38, 39-40 (1861)(same). The rationale behind those cases was the notion that the compulsion facing an individual who owes or needs money is much more compelling than that motivating a person who seeks to buy goods, the latter having the option of foregoing the purchase. See, e.g., General Motors Acceptance Corp. v. Weinrich, 218 Mo.App. 68, 262 S.W. 425, 428 (1924)(“[A] purchaser is not like the needy borrower, a victim of a rapacious lender, since he can refrain from the purchase if he does not choose to pay the price asked by the seller.”). *203On that basis, courts concluded that although money lenders were subject to the usury laws, those who made loans to sell their merchandise were not. James A. Ackerman, Interest Rates and the Law: A History of Usury, 27 Ariz. St. L.J. 61, 94 (1981).

The idea that the two types of loans were distinct was reflected in the judicial coining of the term “time price differential.” James P. Nehf, Effective Regulation of Rent-to-Own Contracts, 52 Ohio St. L.J. 751, 785 n. 144. Courts used that term to refer to interest incurred in connection with the time sales of goods thus guaranteeing that such sales would escape the usury statutes that by their terms only governed “interest.” See Eric A. Posner, Contract Law in the Welfare State: A Defense of the Unconscionability Doctrine, Usury Laws, and Related Limitations on the Freedom to Contract, 24 J. Legal Stud. 283, 303 (1995)(“[C]ourts generally upheld retail installment contracts, on the ground that usury laws prohibit excessive interest on money loans, not on loans of goods.”). Eventually the term “time price differential” made its way into the statutes.10

Legal scholars have challenged the economic basis for drawing a distinction between interest and a time price differential—concluding that the time price differential is nothing more than interest on a loan in the amount of the purchase price extended by a seller to a borrower. Steven W. Bender, Rate Regulation at the Crossroads of Usury and Unconscionability: The Case for Regulating Abusive Commercial and Consumer Interest Rates Under the Unconscionability Standard, 31 Hous. L.Rev. 721, 727 (1994)(“[T]he ‘time price’ exemption ... employed the strained judicial fiction that merchants don’t receive ‘interest’ when selling *204their goods on time. Merchants charging more for goods paid over time than goods purchased for cash were thus freed from usury.”); see 15 Corbin on Contracts § 87.4 (Bender ed.2003); National Consumer Law Center, The Cost of Credit: Regulation and Legal Challenges 50 (hereinafter Cost of Credit )(2d ed.2000); Ackerman, supra, 27 Ariz. St. L.J. at 88; see also Hare v. General Contract Purchase Corp., 220 Ark. 601, 249 S.W.2d 973, 978 (1952)(“Buying at a credit price, as distinguished from a cash price ... is being used as a cloak for usury in many cases by such words as ‘time price differential,’ or some other such language.”). Commentators have also debunked the “compulsion” rationale, concluding that the need for the basic necessities of life is no less compelling than the need for money per se. See Cost of Credit, supra, at 50; Ackerman, supra, 27 Ariz. St. L.J. at 88.

However, the view that the time price doctrine insulated retail installment sales from usury continued to have currency in America through the mid-twentieth century. See, e.g., Hogg, supra, 66 U.S. at 118-19, 17 L.Ed. at 39-40; Steffenauer v. Mytelka & Rose, Inc., 87 N.J.Super. 506, 511, 210 A.2d 88 (Ch.Div.1965)(citing New York, Pennsylvania, Delaware, District of Columbia, Connecticut, and Rhode Island cases subscribing to the time price doctrine). In fact, the charges associated with the credit sale of goods went generally unregulated up until the 1950s. At that point, in response to the drumbeat of scholarly criticism and consumer complaints, some states, including New Jersey, recognized that the credit sale of goods required regulation and began to adopt retail installment sales acts that set interest rate limits on credit sales transactions. See 15 Corbin on Contracts § 87.4 (Bender ed.2003); Ackerman, supra, 27 Ariz. St. L.J. at 94; Nehf, supra, 52 Ohio St. L.J. at 785 n. 144 (citing Jordan & Warren, Disclosure of Finance Charges: A Rationale, 64 Mich. L.Rev. 1285, 1295 (1966)). Through the incorporation of interest rate caps, those enactments effectively repudiated the historic treatment accorded the credit sale of goods and essentially replaced the usury laws that had been previously declared off-limits.

*205Like other state initiatives, New Jersey’s RISA, which became law in 1960, was “part of a package of laws designed to protect consumers from overreaching by others, to protect consumers from overextending their own resources and also to promote the availability of financing to purchase various goods and services.” Girard Acceptance Corp. v. Wallace, 76 N.J. 434, 439, 388 A.2d 582 (1978). Among other things, the statute prescribed the general form that retail installment contracts should take, N.J.S.A. 17:16C-21 to -25; required certain financial disclosures, N.J.S.A. 17:16C-27; detailed prohibited practices, N.J.S.A. 17:16C-35 to -39; and imposed a 10% cap on the time price differential (interest) chargeable in connection with a sale, L. 1960, c. 40, § 41. Penalties for violation were also provided. N.J.S.A. 17.16C-38.3.

B.

At issue is whether Perez’s transaction with Rent-A-Center constitutes a retail installment sales contract.11 RISA defines a “retail installment contract” as follows:

“Retail installment contract” means any contract, other than a retail charge account or an instrument reflecting a sale pursuant thereto, entered into in this State between a retail seller and a retail buyer evidencing an agreement to pay the retail purchase price of goods or services, which are primarily for personal, family or household purposes, or any part thereof, in two or more installments over a period of time. This term includes a security agreement, chattel mortgage, conditional sales contract, or other similar instrument and any contract for the bailment or leasing of goods by which the bailee or lessee agrees to pay as compensation a sum substantially equivalent to or in excess of the value of the goods, and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of such goods upon full compliance with the terms of such retail installment contract.

[N.J.S.A 17:16C-1(b).]

The first sentence of the Act describes a covered sale. Briefly, the contract must be entered into between a retail seller and a retail buyer; it must evidence an agreement to pay the retail purchase price of goods in installments; and the goods must be for *206personal, family, or household use. The second sentence of the Act is a catch-all by which the Legislature declared that instruments analogous but not identical to pure retail installment sales would also fall within the Act. By way of example, the Legislature named security agreements, chattel mortgages, and conditional sales. Also included was the category of “similar instruments,” which was obviously intended to sweep in agreements that might not squarely fit into one of the previously described categories but which approximated them. Certain leases were included as well, presumably because the Legislature recognized that a transaction denominated as a lease could be, in substance, a retail installment sale. The question presented is whether Perez’s rent-to-own contracts with Rent-A-Center are instruments covered by RISA.

It is uncontroverted that the leased goods at issue here are of the type described in RISA—for family, personal, or household use and that that provision of the Act requires no further explication by us. Neither are the definitions of “retail seller” and “retail buyer,” standing alone, of special interest. RISA defines a “retail seller” as

a person who sells or agrees to sell goods12 or services under a retail installment contract or a retail charge account to a retail buyer, and shall include a motor vehicle installment seller.

[N.J.S.A 17:16C-1(c).]

RISA defines a “retail buyer” as

a person who buys or agrees to buy goods or services from a retail seller, not for the purpose of resale, pursuant to a retail installment contract or retail charge account.

[N.J.S.A. 17:16C-1(d).]

*207As the Appellate Division acknowledged, those “definitions are circular because they refer back to the phrase ‘retail installment contract/ which is a separately defined term under RISA.” Perez, supra, 375 N.J.Super. at 80, 866 A.2d 1000. In other words, whether Rent-A-Center fits the definition of “retail seller” and Perez fits the definition of “retail buyer” depends on whether their transaction is consistent with RISA’s description of a “retail installment contract.” That issue of statutory interpretation is the nub of the case.

C.

We turn again to the second sentence of N.J.S.A. 17:16C—1(b):

This term includes a security agreement, chattel mortgage, conditional sales contract, or other similar instrument and any contract for the bailment or leasing of goods by which the bailee or lessee agrees to pay as compensation a sum substantially equivalent to or in excess of the value of the goods, and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of such goods upon full compliance with the terms of such retail installment contract.

[N.J.S.A 17:16C—1(b).]

Rentr-A-Center first argues, and the Appellate Division agreed, that the lease with Perez falls outside of RISA because it does not reflect “an absolute and unequivocal obligation on the part of Perez to purchase the items she leased.” We disagree. There is nothing in RISA that mandates an “absolute and unequivocal obligation” to purchase. Indeed, the last clause of N.J.S.A. 17:16C-1(b) says just the opposite. It states that a RISA contract includes a lease, pursuant to which the bailee or lessee is “bound to become or has the option of becoming, the owner of such goods upon full compliance with the terms of such retail installment contract.” N.J.S.A. 17:16C-1(b) (emphasis added). Obviously, if the lessee has the “option” to purchase goods, then, by definition, he or she has the “option” not to purchase them. Accordingly, reading the statute as a whole, it seems clear that the Legislature never intended an “absolute” or “unequivocal” obligation on the part of the customer to buy the goods.

*208Alternatively, Rent-A-Center contends that even if RISA does not require an absolute obligation to purchase the goods, it plainly requires an obligation by the lessee to pay “a sum equivalent to or in excess of the retail value of the goods.” According to Rent-A-Center, that is a condition separate from the option to purchase, as evidenced by the Legislature’s conjoining the phrases with the word “and.” Because Rent-A-Center’s leases do not obligate a lessee to pay a sum certain and the lessee is free to cancel at any time without having incurred debt, Rent-A-Center maintains that the transaction falls outside the plain language of RISA.

Perez counters that she agreed to pay “a sum substantially equivalent to or in excess of the value of the goods” in order to exercise the option to purchase, and that that broadly satisfies the statutory language. She further argues that the right to cancel is of no consequence.

Certainly, it would be fair to say that in this respect Perez’s rent-to-own contracts are not a perfect fit with the words of the statute. Consequently, we are faced with the problem recognized by Chief Justice Weintraub in New Capitol Bar & Grill Corp. v. Div. of Emp. Sec., 25 N.J. 155, 135 A.2d 465 (1957), when he said:

It is frequently difficult for a draftsman of legislation .to anticipate all situations and to measure his words against them. Hence cases inevitably arise in which a literal application of the language used would lead to results incompatible with the legislative design.

[Id. at 160, 135 A.2d 465.]

Our obligation in such a circumstance is to interpret the statute reasonably to serve its apparent legislative purpose. In furtherance of that goal, we long ago established that

in the quest for the intention, the letter gives way to the rationale of the expression. The words used may be expanded or limited according to the manifest reason and obvious purpose of the law. The spirit of the legislative direction prevails over the literal sense of the terms. The particular words are to be made responsive to the essential principle of the law. When the reason of the regulation is general, though the provision is special, it has a general acceptation. The language is not to be given a rigid interpretation when it is apparent that such *209meaning was not intended. The rule of strict construction cannot be allowed to defeat the evident legislative design. The will of the lawgiver is to be found, not by a mechanical use of particular words and phrases, according to their actual denotation, but by the exercise of reason and judgment in assessing the expression as a composite whole. The indubitable reason of the legislative terms in the aggregate is not to be sacrificed to scholastic strictness of definition or concept. Wrigkt v. Vogt, 7 N.J. 1 [80 A.2d 108] (1951). It is not the meaning of isolated words, but the internal sense of the law, the spirit of the correlated symbols of expression, that we seek in the exposition of a statute. The intention emerges from the principle and policy of the act rather than the literal sense of particular terms, standing alone. Caputo v. Best Foods, Inc., 17 N.J. 259 [111 A.2d 261] (1955).

[Alexander v. N.J. Power and Light Co., 21 N.J. 373, 378-79, 122 A.2d 339 (1956).]

In enacting RISA, the stated legislative purpose was protection of the public interest through the regulation of the charges associated with the time sale of goods. By including conditional sales, chattel mortgages, security interests, leases, and similar instruments within RISA’s protective ambit, the Legislature signaled that it intended to sweep into the Act as many cognate agreements as possible, even those that did not strictly fall within a denominated category. That broad mandate, along with the well-established notion that remedial statutes like RISA should be liberally construed to achieve their salutary aims, Barratt v. Cushman & Wakefield, 144 N.J. 120, 127, 675 A.2d 1094 (1996), require questions regarding the applicability of the statute to be resolved in favor of consumers for whose protection RISA was enacted.

So instructed, we are satisfied that the language of RISA was intended to cover agreements like the ones between Renb-ACenter and Perez. Like most renbto-own consumers, Perez entered into the transactions with Rent-A-Center in order to become the owner of the goods. She took possession of the goods pursuant to instruments that renewed automatically and that were reflected on Renb-A-Center’s books, not as weekly leases, but as long term arrangements of 90 to 120 weeks, respectively. A portion of each of Perez’s payments was assigned to defray the cost of the goods. The remainder of each payment was interest for the privilege of paying for the goods in installments. Perez *210“agreed” that she would have to pay the value of the goods in order to own them. In fact, she would receive title upon the fulfillment of the lease provisions: payment of the value of the goods and exercise of the option by the proffer of the option price. Although Perez could choose not to complete the contract, the entire transaction was structured with ownership as its goal. Thus, on the continuum from pure lease to pure sale, we view Perez’s arrangements with Rent-A-Center as closer to the latter than to the former.

Our conclusion is undergirded by the lease clause when read in the context of two of the denominated RISA categories: “conditional sales” and “similar instruments.” A sale is conditional when possession of the goods is transferred to the buyer who will receive title at some future time upon payment of the full price or upon the happening of some other condition or contingency. If the contingency or condition is not satisfied, title will not pass.13 That definition is fully descriptive of Perez’s leases. Possession of the goods was transferred to her with title to pass upon the satisfaction of the lease terms and the payment of the option price. If she ceased paying, title would not pass. Indeed, Perez’s leases are similar in form to transactions that have been judicially recognized as conditional sales. Nat’l Cash Register Co. v. Daly, 80 N.J.L. 39, 76 A. 325 (N.J.Sup.Ct.1910)(finding cash register contract giving lessee option to purchase for deposit amount at end of lease conditional sale); Lauter Co. v. Isenreath, 77 N.J.L. 323, 72 A. 56 (N.J.Sup.Ct.1909)(finding piano contract retaining title in lessor until all payments made and allowing repossession at any time upon any non-payment conditional sale); Albert Lifson & Sons, Inc. v. Williams, 10 N.J. Misc. 982, 984, 162 A. 129 (Ct. Equity 1931)(finding furniture lease agreement ending in repos*211session upon non-compliance and ownership upon compliance conditional sale); see also In re Vandewater & Co., 219 F. 627 (D.N.J.1915)(finding contract giving lessee option to purchase property during or after installment period with deduction for lease payments conditional sale).

Although RISA does not define the term “conditional sale,” when the Legislature utilizes words that have previously been the subject of judicial construction, it is deemed to have used those words in the sense that has been ascribed to them. State v. Thomas, 166 N.J. 560, 567-68, 767 A.2d 459 (2001); Quaremba v. Allan, 67 N.J. 1, 14, 334 A.2d 321 (1975)(noting that in interpreting statute, it is assumed Legislature is conversant with its own legislation and judicial construction placed thereon). Thus, we view Perez’s leases as a form of conditional sale as that term is used in RISA.

At the very least, Perez’s leases were instruments “similar” to conditional sales. N.J.S.A. 17:16C-1(b). Indeed, it seems to us that RISA’s reference to “similar instruments” was intended to sweep in cleverly drafted agreements like the one before us so that “subtle distinctions” are not allowed to defeat the manifest purposes of the law. Vandewater, supra, 219 F. at 629.

We are simply not satisfied that the cancellation provision so altered the fundamental nature of the transaction that it insulated Perez’s leases from the protections of RISA. That conclusion is bolstered by the fact that the majority of rent-to-own contracts are intended for and in fact result in ownership, not cancellation. To exclude the many purchasers from the protective sweep of RISA by providing a cancellation option that few would exercise would be an intolerably narrow interpretation of a statute limned for consumer protective purposes.14 As the Minnesota Supreme Court observed of rent-to-own contracts like the one before us:

*212[A]lthough these transactions purport to be short-term leases, they operate in substance much like ordinary installment sales. Consumers who purchase goods through rent-to-own agreements may not incur debt, but they still implicitly pay interest in return for the ability to pay for goods over time. Moreover, rent-to-own customers may not have an absolute obligation to repay a principal amount, but their situation is analogous to that of ordinary buyers on credit in that they must either forfeit possession of a good or continue paying for it.

[Miller v. Colortyme, Inc., 518 N.W.2d 544, 549 (Minn.1994).]

We agree, and hold that RISA applies to the rent-to-own contracts at issue here.

Y

We turn next to Perez’s contention that the 30% interest rate cap in the criminal usury statute, N.J.S.A. 2C:21-19(a), applies to the time price differential in RISA.

A.

Our point of departure is the language of the Act. The criminal usury statute prohibits the taking of “any money or other property as interest on the loan or on the forbearance of any money” in “excess of 30% per annum.” N.J.S.A. 2C:21-19(a). As we have previously noted, the time price differential is interest. Indeed, the terms interest and time price differential are used interchangeably within RISA, see, e.g., N.J.S.A. 17:16C-41, and we have judicially declared them to mean the same thing. See Singer Co. v. Gardner, 65 N.J. 403, 409, 323 A.2d 457 (1974)(“[t]he interest, and thus the time-price differential”) (majority opinion); id. at 419 n. 1, 323 A.2d 457 (“[t]he effective interest or time price differential.”) (Pashman, J., dissenting); see also Stanton v. *213 Mattson, 175 Neb. 767, 123 N.W.2d 844, 847 (1963)(finding time price differential to be interest and usurious).

At the time of its enactment, RISA contained its own limitation on the time-price differential that could be charged in connection with a retail installment sales agreement. With the exception of motor vehicles, the cap was 10%. L. 1960, c. 40, § 41. In 1981, as a result of escalating market interest rates during the prior decade, Ackerman, supra, 27 Ariz. St. L.J. at 105-107, New Jersey, like many other jurisdictions, enacted an omnibus bill, Senate Bill No. 3005 (“S. 3005”), L. 1981, c. 103, to remove interest rate caps in a passel of different lending statutes.15 Specifically, in connection with RISA, S. 3005 removed the 10% limitation on time price differentials and adopted the present statutory language:

A retail seller and a motor vehicle installment seller, under the provisions of this act, shall have authority to charge, contract for, receive or collect a time price differential as defined in this act, on any retail installment contract evidencing the sale of goods or services in an amount or amounts as agreed to by the retail seller or motor vehicle installment seller and the buyer on motor vehicles and on all other goods or services.

[N.J.S.A 17:16C-41 (emphasis added).]

That language authorizes parties to agree to the amount of a time price differential. According to Rent-A-Center, the statute, as written, entitles it to charge what the proverbial traffic will bear. We disagree. That might be the answer had S. 3005 been enacted in a vacuum and had Senate Bill No. 3101 (“S. 3101”), L. 1981, c. 104, to which it was tethered, not specifically addressed the same subject.

*214Indeed, at the same time that S. 3005 replaced the specific interest rate ceilings in the lending statutes with an “agreed to” provision, the Legislature adopted S. 3101 and amended the criminal usury statute to lower the interest rate cap from 50% to 30%. S. 3101 was introduced by Senators Weiss, Merlino, and Parker, the sponsors of S. 3005, during the same time frame in which they were moving S. 3005 through the legislative process. Most importantly, S. 3101 addressed the “agreed to” language in S. 3005 and stated that its cap would trump that language:

For the purposes of this section and notwithstanding any law of this State which permits as a maximum interest rate a rate or rates agreed to by the parties of the transaction, any loan or forbearance with an interest rate which exceeds 30% per annum shall not be a rate authorized or permitted by law....

[N.J.S.A. 2C:21-19 (emphasis added).]

Because RISA is, in substance, a “law of this state which permits as a maximum interest rate a rate or rates agreed to by the parties,” it is subject to the 30% cap in N.J.S.A. 2C:21-19.

Apart from the very language of those acts, we think the circumstances surrounding their passage are powerful interpretative aids. Indeed, in Fried v. Kervick, 34 N.J. 68, 167 A.2d 380 (1961), we noted that statutes that are adopted on the same day should be read in pari materia:

The statute being assailed ... was adopted by the Legislature on the same day as the amendment to [the other statute]. The similarity of their subject matter, even though the latter is general in scope while the former is special, renders inescapable the conclusion that they are in pan materia, at least to the extent that both are reflective of the same type of legislative philosophy.

Id. at 70-71, 167 A.2d 380; accord State v. Tillem, 127 N.J.Super. 421, 427, 317 A.2d 738 (App.Div.1974) (observing the particular importance of considering together statutory provisions “passed at the same time to effectuate a given result or to overcome a certain evil”); Norman J. Singer, 2A Sutherland Statutes and Statutory Construction § 51:3 (6th ed. 2000) (“[T]he rule that statutes in pari materia should be construed together has the greatest probative force in the case of statutes relating to the same subject matter passed at the same session of the Legislature, especially if *215they were passed or approved or to take effect on the same day.”) (citations omitted).

Applying those principles to S. 3005 and S. 3101, it seems clear to us from the identity of language and sponsorship and the lockstep enactment of those statutes that the Legislature intended, on the one hand, to free parties to retail installment sales contracts to agree to interest rates reflective of market conditions and, on the other, to protect consumers from overreaching merchants by imposing an absolute cap of 30% within which the parties to a RISA contract could negotiate.

If there was any doubt about that conclusion, Governor Byrne laid it to rest in his statement upon signing the bills. He recognized concerns over the elimination of interest rate ceilings in S. 3005:

Some believe that this bill will ruin many consumers. I disagree. I expect that our banks and other lenders will behave responsibly; competitive pressures should prevent lenders from setting artificially high interest rates. Similarly, I believe that most New Jersey consumers will avoid excessive indebtedness.

[Statement of Governor Brendan Byrne in Signing S. 3005 and S. 3101 (March 31, 1981).]

Significantly, he also declared that those concerns by opponents of S. 3005 were ameliorated by the lowering of the criminal usury rate to 30%. See id.

In that connection, it is well-established that “the governor’s action in approving or vetoing a bill constitutes a part of the legislative process, and the action of the governor upon a bill may be considered in determining legislative intent.” Sutherland Statutory Construction, supra, § 48.05, cited approvingly in State v. Sutton, 132 N.J. 471, 483, 625 A.2d 1132 (1993); Fields v. Hoffman, 105 N.J. 262, 270, 520 A.2d 751 (1987). We take from the legislative history, including the governor’s message, a legislative intent to create a seamless scheme pursuant to which consumers and sellers are accorded flexibility to negotiate interest rates to reflect market conditions subject to the 30% safety cap.

*216B.

RenF-A-Center’s arguments that the criminal usury statute cannot have been intended to apply to RISA do not withstand scrutiny. First, there is nothing in the usury statute to suggest that its specific reference to the “agreed to” language was intended to exclude RISA. Second, as we have noted, and despite Rent-A-Center’s contrary argument, the time price differential is, in fact, “interest,” which is the operative term in the usury statute. Thus, there is nothing on the face of the statute that would be violated by its application here.

Rent-A-Center’s contention that the time price differential is an historical exception to the usury statute, militating against reading it as subject to the usury cap, is equally unavailing. As we have observed, when, in the mid-twentieth century, states across the country began imposing interest rate caps on retail installment sales, that historical exception lost its currency. In fact, the RISA interest rates became a proxy for the usury laws. In other words, the idea that a loan made in connection with the time sale of goods should be unregulated fell out of favor long before this ease, and provides no basis for us to decline application of the 30% cap to RISA. Moreover, even if the historical treatment of the time price differential still had currency in 1981 when S. 3101 and S. 3005 were enacted (which it did not), it goes without saying that the Legislature was free to abrogate that common-law notion if it chose to. We view the enactment of RISA in 1960 along with the amendments to RISA and the usury statute in 1981 as such an abrogation.

Rent-A-Center next argues that we should interpret some recent legislative initiatives as supporting its view. In particular, it references several unsuccessful legislative attempts, since 1990, to amend RISA to expressly limit the permissible time price differential to the 30% rate permitted under the criminal usury statute. See, e.g., Assemb. B. 195, 210th Leg. (N.J.2002); Assemb. B. 1699, 210th Leg. (N.J.2002); Assemb. B. 3399, 209th Leg. (N.J.2001); S.B. 1491, 208th Leg. (N.J.1998); Assemb. B. *217294, 208th Leg. (N.J.1998); Assemb. B. 682, 207th Leg. (N.J.1996); Assemb. B. 4780, 204th Leg. (N.J.1990). Rent-A-Center contends that those initiatives show that the usury cap is not presently applicable to RISA. But unsuccessful attempts to amend a statute are of little use in determining the intent of the Legislature when enacting the original law. Garden State Farms, Inc. v. Bay, 77 N.J. 439, 453, 390 A.2d 1177 (1978) (quoting C. Sands, 2A Sutherland Statutory Construction § 48.18 (4th ed.1973)); Fraser v. Robin Dee Day Camp, 44 N.J. 480, 486, 210 A.2d 208 (1965).

Additionally, in two of the cited unsuccessful legislative attempts, the sponsor’s statements regarding the failed bills specifically contradict Rent-A-Center’s interpretation. They indicate that the intent of the proposed amendments was to “make[] explicit” what the sponsor already believed to be the case, i.e., that the time price differentials permitted under RISA were subject to the provisions of the criminal usury law. Assemb. B. 195, 210th Leg. (N.J.2002); Assemb. B. 3399, 209th Leg. (N.J.2001).

Finally, Rent-A-Center claims that our case law embraces its view that the usury cap cannot be imported into RISA. In support, it cites Sliger v. R.H. Macy & Co., Inc., 59 N.J. 465, 468-69, 283 A.2d 904 (1971), Saul v. Midlantic Nat’l Bank/South, 240 N.J.Super. 62, 572 A.2d 650 (App.Div.1990), and Steffenauer, supra, 87 N.J.Super. 506, 210 A.2d 88. Again, we disagree. Those opinions are no impediment to our holding here. Neither Sliger, Steffenauer, nor Saul have any relevance to the issue before us. Rather, those cases analyzed installment sales relative to the civil usury statute, which contains language that is entirely distinct from N.J.S.A. 2C:21-19. Unlike the criminal usury statute that sweeps in all cases where rates are “agreed to,” the civil usury statute specifically carves out from its coverage other statutes that establish a different interest rate.16 Further, Saul, which was *218decided after S. 3101 and S. 3005 were enacted, actually holds that the criminal usury statute is applicable to retail installment sales. Saul, supra, 240 N.J.Super. at 66 n. 1, 572 A.2d 650.

We therefore reject Rent-A-Center’s arguments to the contrary and hold that the language used and the circumstances surrounding the enactment of S. 3101 and S. 3005 clearly establish the relationship between the statutes. By their passage, the Legislature eliminated the specific 10% cap in RISA, which was far below market rates at the time, to allow the free play of supply and demand to inform negotiated rates. At the same time, it imposed an absolute ceiling of 30% on RISA that was sufficiently above the upper limits of the free market to allow flexibility and yet protect consumers from themselves and rapacious sellers. In sum, we interpret RISA as incorporating the 30% cap. It follows that Rent-A-Center’s rent-to-own contracts, which are governed by RISA, are subject to the cap. Therefore, the counts of Perez’s complaint that allege a violation of those statutes should be reinstated.

VI

We turn finally to Perez’s claim that the Appellate Division erred in failing to separately address her CFA counts.

A.

The CFA was passed “to protect consumers ‘by eliminating sharp practices and dealings in the marketing of merchandise and real estate.’ ” Lemelledo v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 263, 696 A.2d 546 (1997)(quoting Channel Cos. v. *219 Britton, 167 N.J.Super. 417, 418, 400 A.2d 1221 (App.Div.1979)). It prohibits

[t]he act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby....

[N.J.S.A. 66:8-2.]

“Merchandise” includes “any objects, wares, goods, commodities, services or anything offered, directly or indirectly to the public for sale.” N.J.S.A. 56:8-1(c). “Sale” is defined as “any sale, rental or distribution, offer for sale, rental or distribution or attempt directly or indirectly to sell, rent or distribute.” N.J.S.A. 56:8-1(e).

Rent-A-Center concedes that the Act covers the rent-to-own transactions involved here. However, it argues, citing Lemelledo, supra, 150 N.J. 255, 696 A.2d 546, that if RISA applies, then the CFA cannot apply because the transaction was “subject to comprehensive regulation.” Again, we disagree.

The CFA itself instructs that it should be applied in conjunction with other statutes or common law, N.J.S.A. 56:8-2.13 provides:

The rights, remedies and prohibitions accorded by the provisions of this act are hereby declared to be in addition to and cumulative of any other right, remedy or prohibition accorded by the common law or statutes of this State, and nothing contained herein shall be construed to deny, abrogate or impair any such common law or statutory right, remedy or prohibition.

Lemelledo addresses that point:

The language of the CFA evinces a clear legislative intent that its provisions be applied broadly in order to accomplish its remedial purpose, namely, to root out consumer fraud.

... We are loathe to undermine the CFA’s enforcement structure, which specifically contemplates cumulative remedies and private attorneys general, by carving out exemptions for each allegedly fraudulent practice that may concomitantly be regulated by another source of law. The presumption that the CFA applies to covered practices, even in the face of other existing sources of regulation, preserves the Legislature’s determination to effect a broad delegation of enforcement authority to combat consumer fraud.

In order to overcome the presumption that the CFA applies to a covered activity, a court must be satisfied ... that a direct and unavoidable conflict exists between *220application of the CFA and application of the other regulatory scheme or schemes. It must be convinced that the other source or sources of regulation deal specifically, concretely, and pervasively with the particular activity, implying a legislative intent not to subject parties to multiple regulations that, as applied, will work at cross-purposes. We stress that the conflict must be patent and sharp, and must not simply constitute a mere possibility of incompatibility.

[Lemelledo, supra, 150 N.J. at 264, 270, 696 A.2d 546.]

Here, Rent-A-Center has not suggested, even obliquely, any conflict between the CFA and RISA, let alone one of a direct and unavoidable nature, nor do we perceive one. Accordingly, the acts must be construed in concert with each other and Rent-A-Center’s contention that only one can be applicable at a time must be rejected.

B.

The remaining question is whether the Appellate Division erred in omitting consideration of Perez’s CFA count. Perez based her CFA claim on the notion that Rent-A-Center’s interest charges were unconscionable and in violation of the CFA because they exceeded the 30% interest cap in RISA. Therefore, when the trial judge ruled against her on the applicability of RISA and the cap, he automatically dismissed the CFA claim as well. That Perez understood the intertwined nature of her claims is evidenced by the fact that she did not challenge the dismissal of her CFA claim on appeal. Accordingly, when the Appellate Division rejected her RISA and usury claims, there was no warrant for it to separately consider the CFA claim which was not before it and which had no independent factual or legal basis.

Because we have parted company from the Appellate Division on the fundamental issue of the applicability of RISA and the usury cap, to the extent that Perez’s CFA claim is linked to them, it must be reinstated as well.

VII

The judgment of the Appellate Division is reversed. The matter is remanded to the trial judge for reinstatement of Perez’s complaint and for such further proceedings as are warranted.

*221Justice RIVERA-SOTO, concurring in part and dissenting in part.

To the extent the majority “hold[s] that [defendant] Rent-A-Center[, Inc.] is not collaterally estopped from defending against the [Retail Installment Sales Act (“RISA”), N.J.S.A. 17:16C-1 to - 61] claim [plaintiff Hilda] Perez has leveled against it[,]” ante, 186 N.J. at 201-02, 892 A.2d at 1263 (2006), I concur.

However, to the extent the majority concludes that “RISA applies to the rent-to-own contracts at issue here[,]” ante, 186 N.J. at 212, 892 A.2d at 1270 (2006); embraces plaintiffs contention that “the 30% interest rate cap in the criminal usury statute, N.J.S.A. 2C:21-19(a), applies to the time price differential in RISA[,]” ante, 186 N.J. at 212, 892 A.2d at 1270 (2006); and holds that plaintiffs individual and class claims under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -135, must be reinstated, ante, 186 N.J. at 218-21, 892 A.2d at 1273-75 (2006), I respectfully dissent for substantially the reasons expressed in Judge Petrella’s thoughtful and reasoned opinion below. Perez v. Rent-A-Center, Inc., 375 N.J.Super. 63, 866 A.2d 1000 (App.Div.2005). I add only the following.

Many may consider the rent-to-own industry abhorrent. However, setting aside that particularly noxious version of noblesse oblige, the fact remains that merchants that offer goods on a rent-to-own basis nevertheless satisfy an important need. The Federal Trade Commission has acknowledged that

[r]ent-to-own transactions provide immediate access to household goods for a relatively low weekly or monthly payment, typically without any down payment or credit check. Consumers enter into a self-renewing weekly or monthly lease for the rented merchandise, and are under no obligation to continue payments beyond the current weekly or monthly period.... These terms are attractive to many consumers who cannot afford a cash purchase, may be unable to qualify for credit, and are unwilling or unable to wait until they can save for a purchase. Some consumers also may value the flexibility offered by the transaction, which allows return of the merchandise at any time without obligation for further payments or negative impact on the customer’s credit rating. Other consumers may rent merchandise to fill a temporary need or to try a product before buying it. [Federal Trade Commission, Bureau of Economics Staff Report: Survey of Rent-to-Own Customers ES-3 (April 2000).]

*222Moreover, the New Jersey Legislature has similarly recognized the value and contributions of this industry in a most eloquent way: by simply leaving it alone. As the Appellate Division noted in its Appendix, “[v]irtually every other state in the nation, as well as the District of Columbia, has adopted a statute explicitly regulating rent-to-own contracts as a distinct transactional form. The only exceptions are New Jersey, North Carolina and Wisconsin.” Perez v. Rent-A-Center, Inc., supra, 375 N.J.Super. at 89, 866 A.2d 1000 (emphasis supplied).

If there is a need to regulate the rent-to-own industry—a need certainly not demonstrated in this record—then the source of that regulation should be legislative or executive action, and not a cobbled-together judicial cure for a perceived but unsubstantiated ill. Because a rent-to-own contract is not a “retail installment contract” under RISA, the provisions of RISA simply are inapplicable by their own terms. Further, because the criminal usury statute is not intended to apply to a time-price differential, that is, the difference between the cash price of an item and the cost to purchase that same item on credit, it similarly does not apply to rent-to-own contracts. Finally, because plaintiffs individual and class Consumer Fraud Act claims are based on her RISA and criminal usury claims, those too should fail.

For the foregoing reasons, I respectfully dissent.

For reversal and remandment—Chief Justice PORITZ and Justices LONG, LaVECCHIA, ZAZZALI, ALBIN and WALLACE—6.

For concurrence in part; dissent in part—Justice RIVERA-SOTO—1.

Hyman Korn, J.

This is a special proceeding brought on behalf of the State of New York by the Attorney-General, pursuant to subdivision 12 of section 63 of the Executive Law which, so far as pertinent, reads: “Whenever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrates persistent fraud or illegality in the carrying on, conducting or transaction of business, the attorney-general may apply * * * for an order enjoining the continuance of such business activity or of any fraudulent or illegal acts * * * and the court may award the relief applied for or so much thereof as it may deem proper. The word ‘ fraud ’ or ‘ fraudulent ’ as used herein shall include any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, suppression, false pretence, false promise or unconscionable contractual provisions. ’ ’

The respondents are two domestic corporations, ITM, Incorporated (hereafter referred to as ITM), and Gilbert Industries, Inc. (hereinafter referred to as Gilbert); the sole stockholder of both corporations, Rubin Sterngass; the president of both corporations, Joseph Granda; the sales manager of both corporations, Joseph D’Agostino, and three salesmen, Robert Christe, Gordon Hilton and George Brown.

The petition contains two causes of action, the first against the two corporations; and the second against the individual respondents. The Attorney-General seeks an order enjoining, restraining and prohibiting the respondents from further engaging in the fraudulent and illegal practices alleged in the petition.

The answer of the respondents generally is comprised of the usual denials and two affirmative defenses are interposed. The first challenges the constitutionality of subdivision 12 of section 63 of the Executive Law, and the second questions the good faith of the Attorney-General in commencing this proceeding.

A preliminary injunction was heretofore granted by Mr. Justice Schweitzer, who ordered a plenary trial.

The corporate respondents claim they are engaged in the business of selling color television sets, central vacuum cleaning systems, and electronic quartz broilers to consumers at their homes, by a sales method known as a “ referral-sales program.” Basically, this program consisted of inducing a consumer to sign *42a retail installment contract containing time payments for the purchase of one of the products and the execution of an additional commission agreement providing for payment to the consumer of an agreed amount for each sale resulting from the submission of names of potential customers or referral by that consumer to the respondents. The latter agreement contained a further provision that guaranteed remuneration to the consumer for referring 20 names to the respondents and having a “ presentation” made to them of the respondents’ products.

Since all the transactions involved time payment plans, they are governed by the provisions of section 401 et seq. of the Personal Property Law (the Retail Instalment Sales Act).

The petition states that the respondents had intentionally devised a scheme and method of operation aimed at defrauding and obtaining money from the consuming public of this State, because of certain false and fraudulent representations made by the respondents concerning both the products involved and the referral scheme utilized in the promotion of the sales of their products. The respondents are accused of inducing the consumers to execute retail installment contracts requiring the purchasers to pay exorbitant and unconscionable prices for the products involved by reason of fraudulent statements. After the consumers executed the contract, immediate delivery of the products was made and these contracts were immediately sold to finance companies and banks.

The petitioner maintains the documentation employed by the respondents to evidence these transactions was in direct violation of the provisions of subdivision 2 of section 402 of the Personal Property Law, in that the retail installment contract and the commission agreement (and also, other agreements) were kept separate and apart in contradistinction to the statute’s mandate that the contract contain the entire agreement. This procedure, it is claimed, gave immunity to finance companies who purchased the contracts without the “ referral sales agreement ”.

The Attorney-General’s further contention is that the contracts were unconscionable within the meaning of section 2-302 of the Uniform Commercial Code and subdivision 12 of section 63 of the Executive Law, and are unenforcible.

The petitioner further charges the respondents with persistently transacting business in this State through an unlicensed foreign corporation, and alleges that this would bar any action to enforce the contracts in those transactions, and that they be enjoined from doing so. And in addition, it is claimed that the respondent Sterngass illegally utilized a domestic corporation, *43Quartz Unlimited of North America, Inc., to conduct the business of a sales finance company without being duly licensed to do so.

The respondents deny making misrepresentations and fraudulent statements in the conduct of their business. They urge that the law requires in such cases that the proof of such fraud must be clear and convincing. They maintain that the documents used in the transactions complied with subdivision 2 of section 402 of the Personal Property Law, and that the “ referral sales program ” as employed herein, was proper and legal in every respect.

During a lengthy trial, numerous witnesses appeared in behalf of the petitioner, most of them consumers, representatives of finance companies, banks, governmental agencies, suppliers of products involved, and former salesmen of respondents.

Testimony was adduced concerning two other “ selling ” corporations (not respondents here) : Products Presentations, Inc., a domestic corporation and a foreign corporation of the same name. Despondent Sterngass was the sole stockholder of both corporations. Products Presentations, Inc. (N. Y.) was located at the same address as ITM and Gilbert. Granda was its president and D’Agostino its salesman. Hilton and Christe were likewise salesmen employed by this corporation. In its business it utilized the referral-type sales program and dealt in central vacuum cleaner systems and broilers.

Products Presentations, Inc. (Conn.) was unauthorized to do business in this State. D’Agostino was also its president and Hilton and Brown, sales representatives. It likewise fostered the referral-type program and dealt in color television combination sets.

The testimony of Sterngass, the sole stockholder of all four corporations, proves that the same basic pattern of doing business was followed by all four corporate entities and the individuals connected therewith. On September 29, 1964, Products Presentations, Inc. (N. Y.) executed an assurance of discontinuance to the Attorney-General. Following this, business declined and the activities of this corporation were abandoned. ITM (incorporated January 20, 1965) took up and continued to do business in a similar manner. When public reaction incident to the investigation by the Attorney-General of ITM, in July, 1965, caused the business of this corporation to fall off, respondents continued its former practices under the auspices of Gilbert.

In January, 1966, the respondents ceased doing business as Gilbert and commenced doing business as “ Gilbert Indus*44tries ”, a trade name for which a certificate to do business was filed in Connecticut by Products Presentations, Inc. (Conn.). No license to conduct such a business in New York was ever obtained. Whatever corporate facade was used is relatively unimportant, the “ dramatis personae ” remained the same.

The proposed consumer having been referred by a prior “ enrollee ” in the plan, first received either a telephone call or a note from said enrollee. The respondents had already furnished the enrollee with the script to be followed if the contact was by telephone, and a form letter, if contact was to be by mail.

Both the telephone script and letter emphasized only the money-making aspects of an offering to be made by respondents. These forms said nothing about the sale of any product, nor did they even attempt to explain what the contract was all about.

The appointments were arranged through telephone calls made by employees at the respondents’ office. In these conversations they gave no indication of the purpose of the appointment. The witnesses testified that when a respondents’ representative called, usually between 7:30 to 10:00 p.m., they were unaware of the purpose of the visit except that a “profitable” or ‘ ‘ money-making ’ ’ plan was to be discussed.

The representative of the respondents would generally start with a discourse about deficiencies in the effectiveness of television, radio and newspaper advertising; and about how the high cost of such advertising resulted in price escalation for the product so advertised. Then came the revelation of the “ Consumers Coop Advertising Program and the “salesman” would produce a blank form used to show the “ Money Tree ” of earnings under the respondents’ commission agreements.

The respondents varied the plan at different times, basically using two programs. The first, known as ‘£ two-step plan ”, used from January, 1965 to April, 1965, provided that the consumer would receive a $50 commission for each prospect who was referred by the consumer to the respondents and who became an enrollee and would also receive another $50 commission for each person whose name was referred who in turn enrolled in the plan.

After April, 1965, the respondent corporations used a one-step commission program by which the enrollee would earn $50 for each of the first three enrollments, $200 for the fourth, $50 each for the next three, $400 for the eighth, $50 each for the next three, and $1,200 for the twelfth. Some agreements provided for payoff of the retail installment contract on the eighth successful contact and $1,000 for the twelfth. There was no *45agreement in the one-step program to pay the primary enrollee for enrollments made as a result of referrals by those he enrolled.

With each of the plans, there was allegedly at least one guarantee. This provided that each enrollee would receive at least $300 provided: (1) the enrollee submitted 20 or more names, and (2) the respondents made presentation appointments with 20 such named persons, even if none of them enrolled. At times merchandise such as a freezer, a mink stole, $1,000 worth of goods and wares, expensive hi-fi and stereo equipment or a color television set were substituted as the reward.

In some cases a “ supplemental” bonus appointment certificate was given which provided for the payment of an extra bonus of $200 for 10 additional names and appointments after the first 20 appointments were completed. However, in all cases the continual emphasis was upon the submission of the first 20 names.

Under the two-step program the consumer-witnesses were told they could earn as much as $9,000, could pay off the house mortgage, and could make a $1,000 profit (after the product was paid for) to cover outstanding medical bills, among other things, and that the earnings were unlimited.

Although the earnings payable under the one-step program appear to be likewise unlimited, the testimony of the witnesses, fortified by the documentary evidence, clearly shows the accent on the sum of $2,250.

The testimony of almost all of the consumer witnesses is to the effect that they were told by the respondents that 6 to 7 successful enrollments would be produced from every 10 names referred. They were told that they would never have to pay the price of the product out of their own pockets; that the price would only be paid out of commissions, and they would still make a profit.

The order of procedure utilized at the “ presentation” was as follows: (1) discussion and signing of commission agreement, (2) execution of credit statement, (3) execution of retail installment contract, (4) installation order, (5) congratulatory letter of enrollment given to consumer.

The appointments with prospects would usually be for the evenings. The representative would stay at the consumer’s home for a period from one and a half to as many as five hours. The “ salesman ”, as instructed, would use every argument available to convince the prospect of the wonderful program being fostered by his employer and the great opportunity that the prospect is tendered by accepting it. When requested to *46leave the documents for perusal or to return on another occasion, the reply was that this was not possible. It was either now or never.

The representatives were trained to use a ‘1 canned sales pitch ”. This was not only proven by the testimony of the consumer-witnesses, but also by the testimony of respondent Hilton, who further testified that the commission agreement was the first paper signed. His testimony confirmed the statements of every consumer-witness that payments would be made only from commissions.

It is apparent that the sole inducement which led the consumers to execute the various documents involved in these pitiful transactions was the money-making scheme misrepresented to them by the respondents.

Respondents fraudulently represented:

(1) That none of the products offered would cost the consumer any money. They were told they would never have to pay the ££ prices ” recited in the installment contract out of their own pockets; that they would be paid from the commissions earned.

(2) That they were national advertising organizations engaged in advertising promotion.

(3) That the respondent Gilbert was the famous toy manufacturer listed on the stock exchange.

(4) That they were promoting the various products sold by a £ £ word-of-mouth ’ ’ campaign advertising the products through owners of the product instead of using the conventional methods of advertising by radio, television, newspapers and magazines, so that such owners would get the deserved benefit and gain that would otherwise be paid to advertising media.

(5) That commissions would be paid according to the terms of such commission agreements, bonus and supplementary bonus appointment certificates and the guarantees of $300 for appointments with 20 referrals.

(6) That the referral plan was a definite money-making proposition, and that the consumers did and could earn thousands of dollars from it, thus receiving the product without any cost.

(7) That from 40% to 90% (mostly, however, 6 or 7 out of every 10) of the named referrals had been and would be converted to successful enrollments.

(8) That the retail installment contract was only a formality for the delivery of a demonstration model and was only necessary to ensure the payment of commissions.

(9) That the products were to be delivered on a trial basis and the program could be cancelled at any time.

*47The representation that the respondent corporations were national organizations engaged in advertising promotion was totally controverted by the testimony. The representation as to the identity of Gilbert as the famous toy manufacturer is false on its face and its falsity is buttressed by the respondents’ failure to deny in their pleadings its mendacity.

The testimony of Mr. Lyons, the Chief Accountant of the Bureau of Consumer Frauds of the Office of the Attorney-General, conclusively proved the mathematical certainty by which the respondents’ referral plan was doomed to failure, knowledge of which must be charged to the respondents. He demonstrated that, based on respondents’ own representations that respondents had converted and could convert every 20 names furnished by each consumer into 12 enrollments, the plan would follow a geometric progression, so that by the seventh stage it would involve millions of people purchasing these items in untold millions of dollars. If carried on further it could well exceed the population of the State, Nation and indeed the world.

Depending on the size of the sales force available to respondents, and the territory available to them, somewhere along the line, the plan had to fail as a matter of economic feasibility and mathematical certainty. No matter the junction at which this was reached, the number of latest participants would grossly exceed the sum of the participants of all prior grounds. It is patent that by far the greater number of participants could earn no commissions.

This is the vice and quicksand nature of “ endless-chain ” transactions. And it is so apparent that the promoters must be charged with knowledge of the fraud inherent in it. As was cogently stated in McNamara v. Gargett (68 Mich. 454, 459-460), a case involving an “ endless chain ” plan:i( The very scheme itself bears evidence upon its face that it is a fraud and a snare, and yet so cunningly devised that, in the hands of a sharp, shrewd, and designing man, hundreds of the unwary have been defrauded; and the courts should set their seal of condemnation upon it, and pronounce it, as it is, a contract void on the ground of public policy.”

Other courts have similarly held. In Wisconsin (Twentieth Century Co. v. Quilling, 130 Wis. 318, 324-325), the court held: “ Such an [endless-chain] enterprise we regard as contrary to public policy and void. Any contract which contemplates or necessarily involves the defrauding or victimizing of third persons as its ultimate result must be contra bonos mores [citing cases in Michigan, Iowa, Indiana, Ohio and Ontario].”

*48While the futility of the “ endless-chain ” plan is obvious to the promoters, it is not apparent to the consumer participant. That enrollment within the first four rounds can earn commissions is entirely possible and credible. As was said in New v. Tribond Sales Corp. (19 F. 2d 671, 673-674), where an endless-chain scheme which would involve 516,560,852 sales by the fifteenth round was condemned: “ While it is unlikely that the chain would progress to .such an extent in any locality, it is apparent that the extent to which a chain has progressed in a given locality, will have material bearing upon the ability of ‘ contract ’ holders to dispose of coupons, through the narrowing of the field of possible purchasers. It is practically impossible for a ‘ contract ’ holder to obtain any advance information in this connection, but the appellee [promoter] is much more advantageously situated in this respect.”

The rule is clear that where one party to a transaction has superior knowledge, or means of knowledge not open to both parties alike, he is under a legal obligation to speak and his silence constitutes fraud (Noved Realty Corp. v. A. A. P. Co., 250 App. Div. 1; see, also, Rothmiller v. Stein, 143 N. Y. 581; D’Allesandra v. Manufacturers Cas. Ins. Co., 106 N. Y. S. 2d 564).

There was duty on respondents to disclose each consumer’s respective standing in the geometric progression of the endless chain. Suppression of this fact constituted a fraudulent practice tantamount to a false representation for the purpose of inducing consumers to participate in the referral plan of the respondents.

The evidence clearly showed that the plan was not the moneymaking proposition as stated to the consumers. Lyons’ testimony, which was uncontradicted and was substantially based on respondents’ own records, well illustrated the fraud perpetrated on the consumers. None of the consumers earned “ thousands of dollars ’ ’. In only two instances did a consumer earn enough commissions to pay in full for the product involved. There are well over a hundred instances in which no commissions were paid or in which only a $50 advance commission was paid as ‘ ‘ bait ’ ’.

In addition, to negate the efforts of the consumers to earn their commissions, names submitted to respondents were deliberately overlooked. The respondents in some instances did not pay commissions, or failed to pay the promised $300 for submission of 20 names. In further attempts to avoid honoring their obligations under the referral plan, the respondents switched the products they were selling, thereby making it *49difficult for a consumer to recommend prospective customers. In no instance did ITM or Gilbert pay the gift bonuses as promised. Based on this factual experience, the representations made by the respondents concerning the referral plan as recited heretofore were false.

The testimony of respondent Sterngass bolsters this. Referring to records of ITM, he stated this respondent made a total of 223 sales. Of these, 99 enrollees received commissions, 124 did not. The total commissions were $16,115. One individual earned $2,000 consisting of a “ three-way stereo color combination ” as a bonus, valued at approximately $1,100, plus $900, $1,000 or $1,100 in cash. This was unsupported by any documentary evidence. This indicated 98 customers out of 222 shared $14,000, obviously far less than was represented to the consumers.

With respect to Gilbert, the witness testified that of 126 sales, 115 consumers received commissions of $10,250, constituting an average of less than $100 each. It is conclusively shown that by far the great majority of these commissions were $50 “ advance ” commissions. These were unearned and represented lure that snared the consumers into entering the plan.

With regard to the representations that the retail installment contract was not really a contract at all, but was a mere formality for delivery of a demonstration model, and that the products were delivered on a trial basis during which time the program could be cancelled, both the testimony of the witnesses and the actions of the respondents in enforcing payment of the retail installment contract, or the penalty clause recited in the installation order proved beyond cavil that said representations were completely spurious.

It is clear that the referral sales scheme was basically a fraudulent scheme and that the representations made concerning it were factually false and misleading.

The respondents likewise made numerous misrepresentations in regard to the products involved. It was alleged that the electric broiler could only be acquired through the respondent ITM and that it would not be available elsewhere on the market for another three to five years. In fact, however, the manufacturer of the broiler units distributed them through other outlets for ultimate retail sale.

The broiler was represented to cook faster and better than conventional ovens; without any spitter or spatter; and that it is smokeless, does not throw off heat and uses less electricity to run than conventional ovens use. The testimony established *50that the broiler does not cook faster than conventional ovens; that the broiler does spitter and spatter; that the broiler does give off considerable and unbearable smoke; that the broiler does not use less electricity and fails to function adequately.

The representatives acted in a most charlatan manner. They recklessly and flagrantly stated that use of the broiler would prevent cancer and heart disease. A photographic copy of a newspaper clipping plus a list of doctors attesting to this were utilized to emphasize this gross distortion of the truth.

The respondents contended that proof of fraud must be clear and convincing. The petitioner maintains that the measure of proof required is a fair preponderance of the evidence. It is academic in this case to discuss this question, for the court finds that the evidence demonstrates that the proof of fraud is most clear and convincing. The essential elements of fraud, namely, a representation, its falsity, scienter, reliance and damage were established by more than ample proof.

Respondents’ counsel introduced into evidence copies of a so-called Public Relations Report, a sheet containing questions with spaces providing for “Yes” or “No” answers to be made by check marks. These were presented for signature by the consumers. The court finds that this was another document obtained by trick and deceit from the consumers in respondents’ efforts to insulate and protect them, if need be, from legitimate and well-substantiated defenses on the part of consumers.

After the execution of the documents on the night of the appointment, three things happened with lightning speed: (1) delivery of the products early the following morning. At this time the installer obtained a signed delivery slip. The obvious purpose of such speedy delivery was twofold: (a) to effectuate a fait accompli with regard to the transaction to avoid any prospective difficulties when the consumer became aware of what actually was involved and (b) to obtain evidence of delivery necessary for the respondents to secure the “ fast buck ” of the finance company, when the retail installment contract was assigned; (2) the visit of the public relations representative, a few days after delivery. In addition to securing consumer signatures to the report previously discussed, he delivered the telephone script and form letters, and advised the consumers in the method of obtaining new enrollees. Until his visit, the consumers were adjured to do nothing more than prepare a list of names. They were cautioned not to make any contacts until then. They were instructed to call the office of the respondents and furnish additional names.

*51In the interim, (3) the retail installment contract was assigned to a finance company or bank. There is no doubt that prior to September 1, 1965, this document was separated from all the other papers, except the credit application and evidence of delivery. This did not include the commission agreement, bonus appointment certificate and installation order, all containing essential terms of the agreement between the consumer and the respondents. In short, the respondents assigned incomplete instruments to the finance company, although these instruments appeared complete on their face.

After September 1,1965, it appears that respondents assigned to Gerdon Credit Corp. both the installment contracts and the commission agreements. There is, however, no proof that any additional papers, such as the bonus appointment certificate or installation orders, were assigned. Again, it appears the respondents were assigning incomplete instruments.

Any attempts made by consumers to cancel contracts, even as early as the very next day, before any delivery of a product was made, were met with threats to enforce the penalty clause (20% of the contract price) contained in the installation order. Following delivery, rigorous enforcement of the contract was the rule. After the consumer received the customary notice of assignment from the bank or finance company, allowing 10 days for the consumer to complain, any complaint was met with ugly and unscrupulous threats to garnishee and to cause consumers to lose their jobs and the institution of lawsuits.

This unprincipled conduct on the part of the respondents caused the consumers to realize how badly they had been swindled. They could receive no satisfaction from the respondents. They did not and could not obtain reports as to the success or failure of the referrals.

All the finance companies and banks appeared on the witness stand by their appropriate officers except Gerdon Credit Corporation.

Those witnesses who did appear testified they discontinued doing business with respondents when they learned the type of business being conducted by respondents and when collection difficulties beset them. The finance companies participated in the conduct of a business which, to say the least, was not of good moral standards. The fact that the installment contracts the finance companies purchased called for the payment of over $900 for a simple home kitchen cooking broiler, or over $1,500 for a color television set, or almost $1,000 for a vacuum cleaner, should have aroused their suspicion from the inception. A *52degree of callousness is displayed here, perhaps occasioned by an avaricious desire to participate in this lucrative scheme, and in the circumstances is inexcusable.

The courts were burdened with a tremendous volume of litigation. No respect was shown for the simple requirements of law and procedure. In case after case, it was proven that default judgments were obtained which were based on “ sewer service ” and on perjured “ military affidavits ”. An investigation into the extent, nature and responsibility for the ease with which this violation of due process of law occurred is indicated.

It is difficult to conceive of a more deliberately fraudulent and maliciously dishonest pattern of doing business with the public. They gorged themselves on their ill-gotten gains from highly credulous consumers. They engaged in practices in which duplicity was the keynote and fraud the keystone of a commercial enterprise designed to pillage the public. None has the right to earn his livelihood in this fashion. The Attorney-General not only had the right, but the most imperative duty to bring this action. The record clearly established the respondents were given every opportunity to defend themselves. The trial satisfied every requirement of due process and equal protection of the law.

The first affirmative defense challenges the constitutionality of subdivision 12 of section 63 of the Executive Law. It is, of course, well established that legislative enactments carry a strong presumption of constitutionality (Paterson v. University of State of N. Y., 14 N Y 2d 432), and that unconstitutionality must be demonstrated beyond a reasonable doubt before judicial findings of invalidity may be made (Matter of Van Berkel v. Power, 16 N Y 2d 37). There was no proof offered to support the claim of the unconstitutionality of the statute. Legislation designed to protect the consuming public against persistent fraud and illegality is certainly considered the rightful domain of the State and the wrongdoer will not be heard to shield himself behind the cloak of alleged unconstitutionality of a meritorious statute. This affirmative defense is without foundation and is dismissed.

The second affirmative defense, alleging improper motives and bias on the part of the Attorney-General of the State of New York in commencing and prosecuting the action against these respondents, likewise has absolutely no merit. Under the facts here proved, the Attorney-General was within his rights and sworn duty to pursue this proceeding vigorously, which he did. Whatever special motive the respondents conjectured he may *53have had would he absolutely immaterial in a context of this nature. Indeed, it is meritorious and commendable that the Attorney-General, the members of his staff, including the Bureau of Consumer Frauds, have responded with diligence and alacrity in the investigation and prosecution of this case.

The evidence conclusively establishes the persistent, fraudulent conduct of the respondents. And this, as heretofore stated, has been shown by clear and convincing proof and requires the granting of the relief requested in the petition.

The court will consider the claim of the fraudulent and unconscionable prices charged to consumers.

The following table is most illuminating:

As indicated in the table, the prices charged in the retail installment contracts varied from two to six times the cost of the units to respondents. The respondents, although arguing that the cost price to them should include other charges, such as delivery and installation charges, produced no testimony as to composition of these items.

The respondents fraudulently misrepresented that the products were not obtainable elsewhere at these prices. The goods were available elsewhere and at much lower prices. It is clear that these excessively high prices constituted “ unconscionable contractual provisions ” within the meaning of subdivision 12 of section 63 of the Executive Law (see Miami Tribe of Oklahoma v. United States, 281 F. 2d 202). But, even if the prices charged were not unconscionable per se, they were unconscionable within the context of this case. Subdivision (1) of section 2-302 of the Uniform Commercial Code reads as follows: “ (1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.”

The facts in this case fall within the scope of the principles enunciated in Williams v. Walker-Thomas Furniture Co. (350 *54F. 2d 445 [1965]) where the court refused to enforce a contract as unconscionable under the provisions of section 2-302 of the Uniform Commercial Code.

In American Home Improvement v. MacIver (105 N. H. 435 [1964]), the Supreme Court of New Hampshire refused to enforce a contract unconscionable on grounds of price alone. There, for goods and services valued at $959, the defendant was charged $1,609.60, plus time and insurance charges of the type charged here, bringing the total to $2,568.60, payable in 60 payments of $42.81 per month. The court held that the contract should not be enforced because of its unconscionable features. The same disparity exists in the transactions in the instant case to clearly render such transactions unconscionable and when the deceptive practices are also considered, there can be no doubt about the unreasonableness and unfairness of these agreements. No longer do we believe that fraud may be prepetrated by the cry of caveat emptor. We have reached the point where “ Let the buyer beware ” is a poor business philosophy for a social order allegedly based upon man’s respect for his fellow man. Let the seller beware, too! A free enterprise system not founded upon personal morality will ultimately lose freedom. We also believe that it is right, proper, just and equitable to tell the consumer, clearly and adequately, that he is entering into a contract and that he is personally liable for the entire contract price and that he will be required to make stipulated monthly payments, plus carrying charges, etc., in language that the least educated person can understand. And if he chooses not to do so, but instead lures an innocent person into a predicament where a heavy obligation is incurred due to the fraudulent means exercised by the representative, should the innocent victim suffer and hold harmless the seller and thereby reward him for his highhanded conduct?

This court consequently finds these contracts are unconscionable within the meaning of both subdivision 1 of section 2-302 of the Uniform Commercial Code and subdivision 12 of section 63 of the Executive Law and the respondents should be enjoined both from inducing consumers to execute them or in any way enforcing, or aid in enforcing them through their agents or attorneys.

It is petitioner’s contention that the documentation of these transactions as framed by the respondents is in violation of subdivision 2 of section 402 of the Personal Property Law.

The instruments involved herein are (1) a retail installment contract; (2) a commission agreement; (3) a bonus appointment *55certificate; and (4) an installation order (which contained a penalty clause of 20% in ease the consumer cancelled the agreement prior to installation or delivery). All of these were separately but concurrently executed on the same occasion. They are all part of the same contract and must be construed and read together as one (Nau v. Vulcan Rail & Constr. Co., 286 N. Y. 188; Durst v. Abrash, 22 A D 2d 39; 10 N. Y. Jur., Contracts, § 213).

Subdivision 2 of section 402 of the Personal Property Law, prior to the amendment, effective September 1, 1965 (L. 1965, eh. 872) read: “ 2. A contract or obligation shall contain the entire agreement of the parties with respect to the goods and services, and ’ ’.

Chapter 872 of the Laws of 1965 amended the provision, retaining the foregoing quoted words and adding language to the effect that (1) promises to the buyer to compensate him for referrals must be contained in the contract and (2) the contract must contain a clause permitting compensation earned to be deducted from the outstanding balance otherwise due under the contract or obligation.

It is without question that the installment agreement should contain and include the commission arrangement, bonus appointment certificate and the penalty clause provided for in the installation order in a single instrument. The provisions of the amendment do not permit mere incorporation by reference ■ — the mandate is “ shall contain ” and “ must contain ”.

This is reinforced by the legislative and judicial history of section 402 of the Personal Property Law. The statute was passed in 1957 to correct abuses in the field of installment plan selling, for the protection of the buyer (see Memorandum of Consumer Council to the Governor, 1957, 11 An instalment sales plan is illegal if it does not conform to the provisions of the law ”, McKinney’s Sessions Laws of N. Y., 1957, pp. 2113, 2114).

As originally written subdivision 2 of section 402 read as heretofore quoted above. The court, in Matter of Finkelstein (11 Misc 2d 938 [1958]), held that the use of a separate instrument to contain a term of the agreement violated subdivision 2 of section 402 of the Personal Property Law. (See, also, 1957 Atty. Gen. 147.)

The respondents’ contention that it was not until the 1965 amendment that they were required to incorporate the commission agreement is specious. In enacting the amendment the Legislature repeated the exact words of the original statute, then added the rest of the language of the first sentence of subdivision 2 to identify the particular kind of agreement to which the *56whole of the second sentence applied. The second sentence specifically requires that such a contract must contain a clause permitting a buyer to offset commissions against the amount owing under the contract. This can only be interpreted to mean that the amendment was declarative of existing law, as decided in Matter of Finkelstein (supra).

The legislative intent to outlaw the use of an obfuscating series of documents to evidence a single purchase retail installment transaction, whether executed concurrently or at different times is absolutely clear from the design of the entire statute.

The respondents’ practice in not having the instrument contain the commission agreement had an obvious purpose. The commission agreement called for respondents’ performance for more than the period set forth under section 403 (last unnumbered paragraph of subd. 3) of the Personal Property Law. This subdivision provides for the survival of defenses arising out of the nonperformance by the seller of any of the terms of the contract, even as against an assignee who mails notice of the assignment, provided that performance of the seller under the contract is to endure for a period greater than 10 days after such notice is mailed.

By assigning to the finance company only the incomplete retail installment contract, the respondents put the finance company in a position of claiming it had no knowledge that such performance was to last beyond the required period of 10 days. By this subterfuge the respondents deliberately and intentionally deprived the consumers of their rightful defenses against payments under the retail installment contract.

To permit an interpretation of subdivision 2 of section 402 of the Personal Property Law consonant with that advanced by the respondents would be to thwart the legislative intention with respect to the last unnumbered paragraph of subdivision 3 of section 403 of the Personal Property Law. No rule, no statutory interpretation or decision calls for this. On the contrary, every section of the statute should be construed in connection with each other to obtain congruity. (Ex Parte Public Bank, 278 U. S. 101, 104; Gwynne v. Board of Educ., 259 N. Y. 191.)

The court finds that the 1965 amendment required indivisible incorporation of the commission agreement in the installment contract. It further finds that the practices of the respondents in inducing the consumer to sign physically separated commission agreements, bonus appointment certificates and installation orders containing penalty clauses were in violation of the provisions of subdivision 2 of section 402 of .the Personal Property *57Law, and are illegal. Both prior and subsequent to the 1965 amendment of this statute, all of the agreements should have been incorporated in one document.

The petitioner provided the respondents’ attorney and the court with copies of the recent decision of the Supreme Court of the State of Washington, which unanimously held a similar scheme as in the instant case to be a lottery (Sherwood & Roberts — Yakima v. Leach, 409 P. 2d 160 [Wash.]).

At the close of the trial, petitioner moved to amend its pleadings to conform to the proof, pursuant to CPLR 3025 (subd. [c]) and contended that, as a matter of law, the plan or scheme of the respondents constituted a lottery. The determination in granting or denying a motion to amend the pleadings to the proof is one within the discretion of the court. The motion is granted.

In the Leach case (supra) the court points out that the Constitution (State of Washington, art. II, § 24), forbids the Legislature of that State from ever authorizing any lottery.

The Constitution of the State of New York has an even stronger proscription of lotteries. It is contained in the Bill of Rights, section 9 of article I, and so far as pertinent reads: “ no lottery * * * shall hereafter be authorized or allowed ivithin this state; and the legislature shall pass appropriate laws to .prevent offenses against any of the provisions of this section.” (Emphasis supplied.)

This provision is, if anything, even stronger than its Washington counterpart. The interdiction is not only against the exercise of a legislative power, but the words “or allowed” apply to the judicial and executive branches, as well. The Legislature is not merely prevented from authorizing a lottery but also directed (“shall pass appropriate laws”) to prevent lotteries.

The State of Washington has the following definition of a lottery: “A lottery is a scheme for distribution of money or property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance, whether it shall be called a lottery, raffle, gift enterprise, or by any other name, and is hereby declared unlawful and a public nuisance.” (Rev. Code of Wash. 9.59.010.)

New York’s statute reads: “A1 lottery ’ is a scheme for the distribution of property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance, whether called a lottery, raffle, or gift enterprise or by some other name.” (PenalLaw, § 1370.) *58Section 1371 states: “A lottery is unlawful and a public nuisance. ’ ’

The wording of these sections is exactly the same as the Washington statute (supra) except the latter has the words “ money or” immediately before “property”. However, this is of no significance, for our Court of Appeals has construed “ money ” to be property within the meaning of our Penal Law (People v. Hines, 284 N. Y. 93,101).

Both statutes contain the traditionally and universally recognized elements of a lottery, i.e., consideration, prize (distribution of property), and chance. In Hull v. Ruggles (56 N. Y. 424, 427) the court held: “ Where a pecuniary consideration is paid, and it is determined by lot or chance, according to some scheme held out to the public, what and how much he who pays the money is to have for it, that is a lottery.”

The laws of New York prohibiting lotteries apply not merely to pure gambling operation (People v. Hines, supra), but also to business operations conducted as lotteries. The courts of New York have consistently struck down schemes where the underlying purpose was to increase business (Hull v. Ruggles, supra; People ex rel. Ellison v. Lavin, 179 N. Y. 164; People v. Miller, 271 N. Y. 44; Carl Co. v. Lennon, 86 Misc. 255).

In the Leach case (409 p. 2d 160 [Wash.], supra) the court said, at page 162: ‘ ‘ Appellant argues that since the purpose of the referral agreement is to provide Lifetone with prospective purchasers, the agreement is not a lottery. This is not so. If all the elements of a lottery are factually present, it is a lottery. The essential elements as set forth in BOW 9.59.010 are: 1 (1) the distribution of money or property [prize]; (2) chance; and (3) a valuable consideration paid or agreed to be paid for the chance. ’ State v. Dans, 140 Wash. 546.”

A leading case dealing with the subject of lotteries in New York is People ex rel. Ellison v. Lavin (supra). There the court, after finding that “Doubtless the purpose * * * was to increase the sale of its various brands of cigars ” (p. 167), held that the purpose of the plan did not excuse the defendant: “ But the prohibition and regulation of gambling in all forms and lotteries of every kind are unquestionably valid exercises of legislative power, and if the scheme established by the advertiser was in effect a lottery, the fact that the dominant purpose was merely to increase the advertiser’s business does not save it from condemnation.” (p. 168.)

In the Leach case (supra, p. 162-163) the court, discussing the precise scheme involved in the case at bar, said:

*59“ Here, as part of a general operation, respondents may obtain commissions (prize) and they have agreed to pay the purchase price of the equipment (consideration) in an effort to get that prize. The next question is whether that effort is based on chance. ’ ’

# * *

“ Chance within the lottery statute is one which dominates over skill or judgment. The measure is a qualitative one; that is, the chance must be an integral part which influences the result. The measure is not the quantitative proportion of skill and chance in viewing the scheme as a whole. (State ex inf. McKittrick v. Globe-Democrat Publishing Co., 341 Mo. 862, 110 S.W. 2d 705,113 A. L. R 1104 [1937]).”

And further, in its opinion, the court stated:1 ‘ Assuming that respondents in fact used skill and judgment in selecting the referrals, the trial court properly held that chance permeates the entire scheme.” (p. 163.)

In the Lavin case (supra, p. 168) the court said: “ That the scheme provides for the distribution of property is apparent on its face. That the persons among whom the distribution is to be made pay a valuable consideration for the chance when they purchase the cigars * * * is settled by authority. (Hull v. Ruggles, 56 N. Y. 424.) Therefore, the only question presented by the case is whether the distribution is made by chance or not.” The court stated (pp. 170): “ Our statute, however, does not provide that the distribution must be by pure chance or by chance exclusively, but by chance ’ ’ and further stated (pp. 170-171): “ The test of the character of the game is not whether it contains an element of chance or an element of skill, but which is the dominating element that determines the result of the game. * * * Equally we think that a lottery does not cease to be such and becomes a mere contest because its result may be affected, to some slight extent, by the exercise of judgment.”

The court discussed the case of Public Clearing House v. Coyne (194 U. S. 497) wherein the Postmaster-General’s action in impounding the plaintiff’s mail was upheld by the Supreme Court on the ground that the scheme of plaintiff was that of a lottery, and the court concluded (p. 174): “We think the distribution in this case is controlled by chance within the meaning of the statute and that, therefore, it is illegal. The scheme certainly falls far within the requisites of a lottery as defined by the Supreme Court of the United States in the Public Clearing House case, under a statute very similar to our own.”

*60It is therefore apparent that the Washington law on lotteries is identical to that of New York in constitutional origin, statutory definition and judicial approach and interpretation. In giving its examples of the chance permeating the sales scheme the Washington court showed that the result was determined by factors beyond the control of the consumer victims.

The similarity of the facts in the case at bar with those involved in the Leach case is striking. The approach to the consumer is the same. Even the progression table cited by the court there is substantially the same as that testified to by the witness Lyons here.

Whether the respondents would use the given names, whether the “ salesman ” sent to visit the referrals would be a good one or mediocre, whether he would even get there (in the light of so much testimony as to broken dates), whether he would be enthusiastic or deliberately ‘ ‘ spike the deal ’ ’, whether he would make side deals, whether the persons referred would enroll, whether both husband and wife would agree to enroll, whether the market was already saturated, whether the product offered to prospects would be the same already possessed by them — these and many other considerations were all factors which would influence the enrollment of prospects, and all were outside the control or influence of the consumers, particularly under the factual situations disclosed at the trial of this case. There were no rules or established standards that could be depended upon by the victims.

The Court of Appeals (17 N Y 2d 758) recently affirmed the determination of the Appellate Division, First Department, in Matter of People v. Compact Assoc. (22 A D 2d 129) where the court affirmed a judgment of injunction granted at a Trial Term pursuant to subdivision 12 of section 63 of the Executive Law. The facts in that case in no way were as heinous as those indicated at the trial of the case at bar.

One cannot contend that every plan to induce sales by giving credits for leads to sales to others is for that reason, ipso facto, illegal. It is only where, as here, the element of chance so permeates the scheme involved that it must be condemned as a lottery.

The respondents cite the 1965 amendment to subdivision 2 of section 402 (L. 1965, ch. 872) as authorizing the scheme here involved. The amendment must be construed to authorize compensation for leads to sales to others only in the conduct of a legitimate business and that is certainly not the ease here.

*61The respondents’ operation is not a legitimate business enterprise and the court finds that the respondents’ scheme of so-called referral selling is a lottery within the purview of section 1370 of the Penal Law. It is also a public nuisance under section 1371 of the Penal Law, and falls within the interpretation of subdivision 12 of section 63 of the Executive Law as being persistently illegal.

The respondent Sterngass admittedly owned all of the stock of Quartz Unlimited of North American, Inc., a domestic corporation. This corporation was not licensed to do business under the Banking Law as a sales finance company.

Section 492 of the Banking Law reads: “ 1. No person * * * shall engage in the business of a sales finance company in this state without a license ’ ’ and defines a sales finance company as follows (§ 491, subd. 7): “‘Sales finance company ’ means a person engaged, in whole or in part, directly or indirectly, in the business of purchasing or otherwise acquiring retail installment contracts, obligations * * * made by and between other parties, or any interest therein.” Any unlicensed acquisition of such contracts is a violation of the Banking Law (Matter of Household Credit Corp. v. Clark, 19 Misc 2d 33).

It was proven that several of the retail installment contracts were assigned to Quartz by respondent ITM and in turn by Quartz to G. A. C. Funding, a licensed sales finance company, which paid Quartz for them. Respondent Sterngass thus is responsible for violating the aforesaid section of the Banking Law.

It was also shown that respondents Sterngass (as sole stockholder) and D’Agostino (as president), since January, 1966 did a substantial business through a foreign corporation unlicensed to do business in New York. The petitioner proved these transactions were consummated in New York.

The court finds that these acts were in violation of subdivision (a) of section 1301 of the Business Corporation Law. The respondents Sterngass and D’Agostino as well as their successors in interest as well as the foreign corporation Products Presentations, Inc. (Conn.) or its alter ego, Gilbert Industries (trade name), may not maintain any action on these contracts pursuant to section 1312 of the Business Corporation Law.

The transaction of business by this unlicensed entity through respondents constitutes additional persistent and repeated illegal practices within the meaning of the Executive Law.

Financial problems were created for the consumers by the respondents. Participants in the referral deal, at the urging of a friend, relative or neighbor, and who, in turn, similarly imposed *62upon others, were both resented and resentful. The referral selling trick was actually a gold-plated deception.

Many illegalities, including those heretofore related, were involved in connection with this vicious scheme. Many people of limited means were the prey of rapacious and avaricious promoters. These victims now find themselves embroiled in straightened circumstances. Even the courts were imposed upon by the respondents and burdened with additional litigation. Trickery and perjury were used in some of these cases. The court is impelled by all of the circumstances to urge the Attorney-General to communicate with the proper authorities so that a thorough inquiry can be made into all phases of this plan of “ sales ” operation. The only possible hope in' deterring others from the practice of swindling innocent consumers is the glaring light of public exposure.

The court makes the following findings:

1. The petitioner proved, and the respondents are guilty of, all the fraudulent practices alleged in the petition.

2. The respondents repeatedly and persistently violated subdivision 2 of section 402 of the Personal Property Law both before and after the 1965 amendment and that such illegal practices were for the perpetration of fraud.

3. The contracts were unconscionable within the meaning of section 2-302 of the Uniform Commercial Code and subdivision 12 of section 63 of the Executive Law and are unenforcible.

4. The respondents were guilty of persistent illegal acts in conducting a lottery and all contracts are “ utterly void

5. The respondents, Sterngass and D’Agostino, are guilty of persistently transacting business through an unlicensed foreign corporation and neither they, the foreign corporation nor its successors in interest may maintain any action on such contracts. Furthermore, these respondents should be enjoined from enforcing or aiding in the enforcement of such contracts.

6. That respondent Sterngass, through Quartz Unlimited of North America, Inc., illegally conducted the business of a sales finance company in this State.

cononusioiT

The relief requested by the petitioner for an injunction to effectuate the prevention of such fraudulent and illegal practices by any of the respondents is granted and the State of New York is awarded, pursuant to CPLR 8303 (subd. [a], par. 6), costs of $2,000 against respondent Rubin Sterngass, and the sum of $500 costs as against each of the respondents, Joseph Granda and Joseph D’Agostino. .

Francis J. Donovan, J.

Plaintiff brings this action for $1,364.10, alleging that the latter amount is owed by the defendants to the plaintiff on account of the purchase of a combination refrigerator-freezer for which they agreed to pay the .sum of *27$1,145.88. The balance of the amount consists of a claim for attorney fees in the amount of $227.35 and a late charge of $22.87. The only payment made on account of the original indebtedness is the sum of $32.

The contract for the refrigerator-freezer was negotiated orally in Spanish between the defendants and a Spanish-speaking salesman representing the plaintiff. In that conversation the defendant husband told the salesman that he had but one week left on his job and he could not afford to buy the appliance. The salesman distracted and deluded the defendants by advising them that the appliance would cost them nothing because they would be paid bonuses or commissions of $25 each on the numerous sales that would be made to their neighbors and friends. Thereafter there was submitted to and signed by the defendants a retail installment contract entirely in English. The retail contract was neither translated nor explained to the defendants. In that contract there was a cash sales price set forth of $900. To this was added a credit charge of $245.88, making a total of $1,145.88 to be paid for the appliance.

The plaintiff admitted that cost to the plaintiff corporation for the appliance was $348. •

No defense of fraud was set forth in the pleadings and accordingly such defense is not available.

However, in the course of the trial, it did appear to the court that the contract might be unconscionable. The court therefore continued the trial at an adjourned date to afford a reasonable opportunity to the parties to present evidence as to the commercial setting, purpose and effect of the contract.

The court finds that the sale of the appliance at the price and terms indicated in this contract is shocking to the conscience. The service charge, which almost equals the price of the appliance is in and of itself indicative of the oppression which was practiced on these defendants. Defendants were handicapped by a lack of knowledge, both as to the commercial situation and the nature and terms of the contract which was submitted in a language foreign to them.

The question presented in this case is simply this: Does the court have the power under section 2-302 of the Uniform Commercial Code to refuse to enforce the price and credit provisions of the contract in order to prevent an unconscionable result.

It is normally stated that the parties are free to make whatever contracts they please so long as there is no fraud or illegality (Allegheny Coll. v. National Chautauqua County Bank 246 N. Y. 369.)

*28However, it is the apparent intent of the Uniform Commercial Code to modify this general rule by giving the courts power “ to police explicitly against the contracts or clauses which they find to be unconscionable. * * * The principle is one of the prevention of oppression and unfair surprise.” (See the official comment appended to the statute in the note on page 193, McKinney’s Cons. Laws of N. Y., Book 62½, Uniform Commercial Code.)

The comment cites Campbell Soup Co. v. Wentz (172 F. 2d 80) to illustrate the principle. It is interesting to note that the Wentz case involved oppression with respect to the price Campbell Company agreed to pay for carrots, the price specified in the contract being $23 to $33 a ton. In the particular case Wentz, the farmer, refused to deliver carrots at the contract price, since the market price at such time had increased to $90 a ton. The Court of Appeals said (p. 83): “ We think it too hard a bargain and too one-sided an agreement to entitle the plaintiff to relief in a court of conscience. ’ ’

In the instant case the court finds that here too, it was “ too hard a bargain ’ ’ and the conscience of the court will not permit the enforcement of the contract as written. Therefore the plaintiff will not be permitted to recover on the basis of the price set forth in the retail installment contract, namely $900 plus $245.85 as a service charge.

However, since the defendants have not returned the refrigerator-freezer, they will be required to reimburse the plaintiff for the cost to the plaintiff, namely $348. No allowance is made on account of any commissions the plaintiff may have paid to salesmen or for legal fees, service charges or any other matters of overhead.

Accordingly the plaintiff may have judgment against both defendants in the amount of $348, with interest, less the $32 paid on account, leaving a net balance of $316, with interest from December 26, 1964.

*190Sol Wachtler, J.

On August 31, 1965 the plaintiffs, who are welfare recipients, agreed to purchase a home freezer unit for $900 as the result of a visit from a salesman representing Tour Shop At Home Service, Inc. With the addition of the time credit charges, credit life insurance, credit property insurance, and sales tax, the purchase price totaled $1,234.80. Thus far the plaintiffs have paid $619.88 toward their purchase. The defendant claims that with various added credit charges paid for an extension of time there is a balance of $819.81 still due from the plaintiffs. The uncontroverted proof at the trial established that the freezer unit, when purchased, had a maximum retail value of approximately $300. The question is whether this transaction and the resulting contract could be considered unconscionable within the meaning of section 2-302 of the Uniform Commercial Code which provides in part:

“ (1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

“ (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination. ’? (L. 1962, ch. 553, eff. Sept. 27, 1964.).

There was a time when the shield of caveat emptor would protect the most unscrupulous in the marketplace ■ — a time when the law, in granting parties unbridled latitude to make their own contracts, allowed exploitive and callous practices which shocked the conscience of both legislative bodies and the courts.

The effort to eliminate these practices has continued to pose a difficult problem. On the one hand it is necessary to recognize the importance of preserving the integrity of agreements and the fundamental right of parties to deal, trade, bargain, and contract. On the other hand there is the concern for the uneducated and often illiterate individual who is the victim of gross inequality of bargaining power, usually the poorest members of the community.

Concern for the protection of these consumers against overreaching by the small but hardy breed of merchants who would prey on them is not novel. The dangers of inequality of bargaining power were vaguely recognized in the early English common law when Lord Habdwioke wrote of a fraud, which *191“ may be apparent from the intrinsic nature and subject of the bargain itself; such as no man in his senses and not under delusion would make The English authorities on this subject were discussed in Hume v. United States (132 U. S. 406, 411 [1889]) where the United States Supreme Court characterized (p. 413) these as “ cases in which one party took advantage of the other’s ignorance of arithmetic to impose upon 'him, and the fraud was apparent from the face of the contracts.”

The law is beginning to fight back against those who once took advantage of the poor and illiterate without risk of either exposure or interference. From the common-law doctrine of intrinsic fraud we have, over the years, developed common and statutory law which tells not only the buyer but also the seller to beware. This body of laws recognizes the importance of a free enterprise system but at the same time will provide the legal armor to protect and safeguard the prospective victim from the harshness of an unconscionable contract.

Section 2-302 of the Uniform Commercial Code enacts the moral sense of the community into the law of commercial transactions. It authorizes the court to find, as a matter of law, that a contract or a clause of a contract was ‘ ‘ unconscionable at the time it was made ”, and upon so finding the court may refuse to enforce the contract, excise the objectionable clause or limit the application of the clause to avoid an unconscionable result. “ The principle ”, states the Official Comment to this section, “ is one of-the prevention of oppression and unfair surprise It permits a court to accomplish directly what heretofore was often accomplished by construction of language, manipulations of fluid rules of contract law and determinations based upon a presumed public policy.

There is no reason to doubt, moreover, that this section is intended to encompass the price term of an agreement. In addition to the fact that it has already been so applied (Matter of State of New York v. ITM, Inc., 52 Misc 2d 39; Frostifresh Corp. v. Reynoso, 52 Misc 2d 26, revd. 54 Misc 2d 119; American Home Improvement v. MacIver, 105 N. H. 435), the statutory language itself makes it clear that not only a clause of the contract, but the contract in toto, may be found unconscionable as a matter of law. Indeed, no other provision of an agreement more intimately touches upon the question of unconscionability than does the term regarding price.

Fraud, in the instant case, is not present; nor is it necessary under the statute. The question which presents itself is whether or not, under the circumstances of this case, the sale of a freezer unit having a retail value of $300 for $900 ($1,439.69 including *192credit charges and $18 sales tax) is unconscionable as a matter of law. The court believes it is.

Concededly, deciding the issue is substantially easier than explaining it. No doubt, the mathematical disparity between $300, which presumably includes a reasonable profit margin, and $900, which is exorbitant on its face, carries the greatest weight. Credit charges alone exceed by more than $100 the retail value of the freezer. These alone, may be sufficient to sustain the decision. Yet, a caveat is warranted lest we reduce the import of section 2-302 solely to a mathematical ratio formula. It may, at times, be that; yet it may also be much more. The very limited financial resources of the purchaser, known to the sellers at the time of the sale, is entitled to weight in the balance. Indeed, the value disparity itself leads inevitably to the felt conclusion that knowing advantage was taken of the plaintiffs. In addition, the meaningfulness of choice essential to the making of a contract can be negated by a gross inequality of bargaining power. (Williams v. Walker-Thomas Furniture Co., 350 F. 2d 445.)

There is no question about the necessity and even the desirability of installment sales and the extension of credit. Indeed, there are many, including welfare recipients, who would be deprived of even the most basic conveniences without the use of these devices. Similarly, the retail merchant selling on installment or extending credit is expected to establish a pricing factor which will afford a degree of protection commensurate with the risk of selling to those who might be default prone. However, neither of these accepted premises can clothe the sale of this freezer with respectability.

Support for the court’s conclusion will be found in a number of other eases already decided. In American Home Improvement v. MacIver (supra) the Supreme Court of New Hampshire held that a contract to install windows, a door and paint, for the price of $2,568.60, of which $809.60 constituted interest and carrying charges and $800 was a salesman’s commission was unconscionable as a matter of law. In Matter of State of Neto York v. ITM, Inc. (supra) a deceptive and fraudulent scheme was involved, but standing alone, the court held that the sale of a vacuum cleaner, among other things, costing the defendant $140 and sold by it for $749 cash or $920.52 on time purchase was unconscionable as a matter of law. Finally, in Frostifresh Corp. v. Reynoso (supra) the sale of a refrigerator costing the seller $348 for $900 plus credit charges of $245.88 was unconscionable as a matter of law.

*193One final point remains. The defendant argues that the contract of June 15, 1966, upon which this suit is based, constitutes a financing agreement and not a sales contract. To support its position, it points to the typed words 1 ‘ Refinance of Freezer A/C #6766 and Food A/C #56788 ” on the agreement and to a letter signed by the plaintiffs requesting refinance of the same items. The request for “ refinancing ” is typed on the defendant’s letterhead. The quoted refinance statement is typed on a form agreement entitled “ Star Credit Corporation — Retail Instalment Contract ”. It is signed by the defendant as “ seller ” and by the purchasers as “ buyer ”. Above the signature of the buyers, they acknowledge ‘ ‘ receipt of an executed copy of this RETAIL instalment contract ’ ’. The June 15, 1966 contract by defendant is on exactly the same form as the original contract of August 31, 1965. The original, too, is entitled “ Star Credit Corporation — Retail Instalment Contract ”. It is signed, however, by “Your Shop At Home Service, Inc.” Printed beneath the signatures is the legend ‘1 Duplicate for Star ”. In substance and effect, the agreement of June 25, 1966 constitutes a novation and replacement of the earlier agreement. It is, in all respects, as it reads, a ‘ ‘ Retail Instalment Contract ’ ’.

Having already paid more than $600 toward the purchase of this $300 freezer unit, it is apparent that the defendant has already been amply compensated. In accordance with the statute,, the application of the payment provision should be limited to amounts already paid by the plaintiffs and the contract be reformed and amended by changing the payments called for therein to equal the amount of payment actually so paid by the plaintiffs.

Mr. Justice Douglas

delivered the opinion of the Court.

Respondents instituted a garnishment action against petitioner as defendant and Miller Harris Instrument Co., her employer, as garnishee. The complaint alleged *338a claim of $420 on a promissory note. The garnishee filed its answer stating it had wages of $63.18 under its control earned .by petitioner and unpaid, and that it would pay one-half to petitioner as a subsistence allowance1 and hold the other half subject to the order of the court.

Petitioner moved that the garnishment proceedings be dismissed for failure to satisfy the due process requirements of the Fourteenth Amendment. The Wisconsin Supreme Court sustained the lower state court in approving the procedure. 37 Wis. 2d 163, 154 N. W. 2d 259. The case is here on a petition for a writ of certiorari. 393 U. S. 1078.

The Wisconsin statute gives a plaintiff 10 days in which to serve the summons and complaint on the defendant after service on the garnishee.2 In this case petitioner was served the same day as the garnishee. She nonetheless claims that the Wisconsin garnishment procedure violates that due process required by the Fourteenth Amendment, in that notice and an opportunity to be heard are not given before the in rem seizure of the wages. What happens in Wisconsin is that the clerk of the court issues the summons at the request of the creditor’s lawyer; and it is the latter who by serving the garnishee sets in motion the machinery whereby the *339wages are frozen.3 They may, it is true, be unfrozen if the trial of the main suit is ever had and the wage earner wins on the merits. But in the interim the wage earner is deprived of his enjoyment of earned wages without any opportunity to be heard and to tender any defense he may have, whether it be fraud or otherwise.

Such summary procedure may well meet the requirements of due process in extraordinary situations. Cf. Fahey v. Mallonee, 332 U. S. 245, 253-254; Ewing v. Mytinger & Casselberry, Inc., 339 U. S. 594, 598-600; Ownbey v. Morgan, 256 U. S. 94, 110-112; Coffin Bros. v. Bennett, 277 U. S. 29, 31. But in the present case no situation requiring special protection to a state or creditor interest is presented by the facts; nor is the Wisconsin statute narrowly drawn to meet any such unusual condition. Petitioner was a resident of this Wisconsin community and in personam jurisdiction was readily obtainable.

The question is not whether the Wisconsin law is a wise law or unwise law. Our concern is not what philosophy Wisconsin should or should not embrace. See Green v. Frazier, 253 U. S. 233. We do not sit as a super-legislative body. In this case the sole question is whether there has been a taking of property without that procedural due process that is required by the Fourteenth Amendment. We have dealt over and over again with the question of what constitutes “the right to be heard” (Schroeder v. New York, 371 U. S. 208, 212) within the meaning of procedural due process. See Mullane v. Central Hanover Trust Co., 339 U. S. 306, 314. In the latter case we said that the right to be heard “has little reality or worth unless one is informed that the matter is pending and can choose for himself whether *340to appear or default, acquiesce or contest.” 339 U. S., at 314. In the context of this case the question is whether the interim freezing of the wages without a chance to be heard violates procedural due process.

A procedural rule that may satisfy due process for attachments in general, see McKay v. McInnes, 279 U. S. 820, does not necessarily satisfy procedural due process in every case. The fact that a procedure would pass muster under a feudal regime does not mean it gives necessary protection to all property in its modern forms. We deal here with wages — a specialized type of property presenting distinct problems in our economic system. We turn then to the nature of that property and problems of procedural due process.

A prejudgment garnishment of the Wisconsin type is a taking which may impose tremendous hardship on wage earners with families to support. Until a recent Act of Congress,4 § 304 of which forbids discharge of employees on the ground that their wages have been garnished, garnishment often meant the loss of a job. Over and beyond that was the great drain on family income. As stated by Congressman Reuss:5

“The idea of wage garnishment in advance of judgment, of trustee process, of wage attachment, or whatever it is called is a most inhuman doctrine. It compels the wage earner, trying to keep his family together, to be driven below the poverty level.”

Recent investigations of the problem have disclosed the grave injustices made possible by prejudgment garnishment whereby the sole opportunity to be heard comes after the taking. Congressman Sullivan, Chairman of *341the House Subcommittee on Consumer Affairs who held extensive hearings on this and related problems stated:

“What we know from our study of this problem is that in a vast number of cases the debt is a fraudulent one, saddled on a poor ignorant person who is trapped in an easy credit nightmare, in which he is charged double for something he could not pay for even if the proper price was called for, and then hounded into giving up his pound of flesh, and being fired besides.” 114 Cong. Rec. 1832.

The leverage of the creditor on the wage earner is enormous. The creditor tenders not only the original debt but the “collection fees” incurred by his attorneys in the garnishment proceedings:

“The debtor whose wages are tied up by a writ of garnishment, and who is usually in need of money, is in no position to resist demands for collection fees. If the debt is small, the debtor will be under considerable pressure to pay the debt and collection charges in order to get his wages back. If the debt is large, he will often sign a new contract of ‘payment schedule’ which incorporates these additional charges.”6

Apart from those collateral consequences, it appears that in Wisconsin the statutory exemption granted the wage earner7 is “generally insufficient to support the debtor for any one week.” 8

The result is that a prejudgment garnishment of the Wisconsin type may as a practical matter drive a wage-*342earning family to the wall.9 Where the taking of one’s property is so obvious, it needs no extended argument to conclude that absent notice and a prior hearing (cf. Coe v. Armour Fertilizer Works, 237 U. S. 413, 423) this prejudgment garnishment procedure violates the fundamental principles of due process.

Reversed.

Mr. Justice Harlan,

concurring.

Particularly in light of my Brother Black’s dissent, I think it not amiss for me to make explicit the precise basis on which I join the Court’s opinion. The “property” of which petitioner has been deprived is the use of the garnished portion of her wages during the interim period between the garnishment and the culmination of the main suit. Since this deprivation cannot be characterized as de minimis, she must be accorded the usual requisites of procedural due process: notice and a prior hearing.

The rejoinder which this statement of position has drawn from my Brother Black prompts an additional word. His and my divergence in this case rests, I think, upon a basic difference over whether the Due Process Clause of the Fourteenth Amendment limits state action by norms of “fundamental fairness” whose content in any given instance is to be judicially derived not alone, as my colleague believes it should be, from the specifics of the Constitution, but also, as I believe, from concepts *343which are part of the Anglo-American legal heritage— not, as my Brother Black continues to insist, from the mere predilections of individual judges.

From my standpoint, I do not consider that the requirements of “notice” and “hearing” are satisfied by the fact that the petitioner was advised of the garnishment simultaneously with the garnishee, or by the fact that she will not permanently lose the garnished property until after a plenary adverse adjudication of the underlying claim against her, or by the fact that relief from the garnishment may have been available in the interim under less than clear circumstances. Compare the majority and dissenting opinions in the Wisconsin Supreme Court, 37 Wis. 2d 163, 178, 154 N. W. 2d 259, 267 (1967). Apart from special situations, some of which are referred to in this Court’s opinion, see ante, at 339, I think that due process is afforded only by the kinds of “notice” and “hearing” which are aimed at establishing the validity, or at least the probable validity, of the underlying claim against the alleged debtor before he can be deprived of his property or its unrestricted use. I think this is the thrust of the past cases in this Court. See, e. g., Mullane v. Central Hanover Trust Co., 339 U. S. 306, 313 (1950); Opp Cotton Mills v. Administrator, 312 U. S. 126, 152-153 (1941); United States v. Illinois Cent. R. Co., 291 U. S. 457, 463 (1934); Londoner v. City & County of Denver, 210 U. S. 373, 385-386 (1908).* And I am *344quite unwilling to take the unexplicated per curiam in McKay v. McInnes, 279 U. S. 820 (1929), as vitiating or diluting these essential elements of due process.

Mr. Justice Black,

dissenting.

The Court here holds unconstitutional a Wisconsin statute permitting garnishment before a judgment has been obtained against the principal debtor. The law, however, requires that notice be given to the principal debtor and authorizes him to present all of his legal defenses at the regular hearing and trial of the case. The Wisconsin law is said to violate the “fundamental principles of due process.” Of course the Due Process Clause of the Fourteenth Amendment contains no words that indicate that this Court has power to play so fast and loose with state laws. The arguments the Court makes to reach what I consider to be its unconstitutional conclusion, however, show why it strikes down this state law. It is because it considers a garnishment law of this kind to be bad state policy, a judgment I think the state legislature, not this Court, has power to make. The Court shows it believes the garnishment policy to be a “ ‘most inhuman doctrine’ ”; that it “ ‘compels the wage earner, trying to keep his family together, to be driven below the poverty level’ ”; that “ ‘in a vast number of cases the debt is a fraudulent one, saddled on a poor ignorant person who is trapped in an easy credit nightmare, in which he is charged double for something he could not pay for even if the proper price was called for, and then hounded into giving up his pound of flesh, and being fired besides.’ ”

The foregoing emotional rhetoric might be very appropriate for Congressmen to make against some phases of garnishment laws. Indeed, the quoted statements were made by Congressmen during a debate over a proposed *345federal garnishment law. The arguments would also be appropriate for Wisconsin’s legislators to make against that State’s garnishment laws. But made in a Court opinion, holding Wisconsin’s law unconstitutional, they amount to what I believe to be a plain, judicial usurpation of state legislative power to decide what the State’s laws shall be. There is not one word in our Federal Constitution or in any of its Amendments and not a word in the reports of that document’s passage from which one can draw the slightest inference that we have authority thus to try to supplement or strike down the State’s selection of its own policies. The Wisconsin law is simply nullified by this Court as though the Court had been granted a super-legislative power to step in and frustrate policies of States adopted by their own elected legislatures. The Court thus steps back into the due process philosophy which brought on President Roosevelt’s Court fight. Arguments can be made for outlawing loan sharks and installment sales companies but such decisions, I think, should be made by state and federal legislators, and not by this Court.

This brings me to the short concurring opinion of my Brother Harlan, which makes “explicit the precise basis” on which he joins the Court’s opinion. That basis is:

“The ‘property’ of which petitioner has been deprived is the use of the garnished portion of her wages during the interim period between the garnishment and the culmination of the main suit. Since this deprivation cannot be characterized as de minimis, she must be accorded the usual requisites of procedural due process: notice and a prior hearing.”

Every argument implicit in this summary statement of my Brother Harlan’s views has been, in my judgment, satisfactorily answered in the opinion of the Supreme Court of Wisconsin in this case — an outstanding opinion *346on constitutional law. 37 Wis. 2d 163, 154 N. W. 2d 259. That opinion shows that petitioner was not required to wait until the “culmination of the main suit,” that is, the suit between the creditor and the petitioner. In fact the case now before us was not a final determination of the merits of that controversy but was, in accordance with well-established state court procedure, the result of a motion made by the petitioner to dismiss the garnishment proceedings. With reference to my Brother Harlan’s statement that petitioner’s deprivation could not be characterized as de minimis, it is pertinent to note that the garnishment was served on her and her employer on the same day, November 21, 1966; that she, without waiting for a trial on the merits, filed a motion to dismiss the garnishment on December 23, 1966, which motion was denied by the Circuit Court on April 18, 1967; and that it is that judgment which is before us today. The amount of her wages held up by the garnishment was $31.59. The amount of interest on the wages withheld even if computed at 10% annually would have been about $3. Whether that would be classified as de minimis I do not know and in fact it is not material to know for the decision of this case.

In the motion to dismiss, petitioner, according to the Supreme Court of Wisconsin, asserted a “number of grounds based on injustices and deprivations which have been, or are likely to be, suffered by others, but which she has not personally experienced.” 37 Wis. 2d 163, 166, 154 N. W. 2d 259, 261. The court went further and pointed out that under Wisconsin law the court would not strike down a law as unconstitutional on the ground that some person other than the challenger of that law might in the future be injured by its unconstitutional part. It would seem, therefore, that the great number of our cases holding that we do not determine the consti*347tutionality of state statutes where the judgment on them was based on state law would prevent our passing on this case at all.

The indebtedness of petitioner was evidenced by a promissory note, but petitioner’s affidavit in support of the motion to dismiss, according to the Wisconsin Supreme Court contained no allegation that she is not indebted thereon to the plaintiff. Of course if it had alleged that, or if it had shown in some other way that this was not a good-faith lawsuit against her, the Wisconsin opinion shows that this could have disposed of the whole case on the summary motion.

Another ground of unconstitutionality, according to the state court, was that the Act permitted a defendant to post a bond and secure the release of garnished property and that this provision denied equal protection of the law “to persons of low income.” With reference to this ground, the Wisconsin court said:

“Appellant has made no showing that she is a person of low income and unable to post a bond.” 37 Wis. 2d, at 167, 154 N. W. 2d, at 261.

Another ground of unconstitutionality urged was that since many employers discharge garnished employees for being unreliable, the law threatened the gainful employment of many wage earners. This contention the Supreme Court of Wisconsin satisfactorily answered by saying that petitioner had “made no showing that her own employer reacted in this manner.”

Another ground challenging the state act was that it affords 10 days’ time to a plaintiff to serve the garnishee summons and complaint on the defendant after service of the summons on the garnishee. This, of course, she could not raise. The Wisconsin Supreme Court’s answer to this was that petitioner was served on the same day as the garnishee.

*348The state court then pointed out that the garnishment proceedings did not involve “any final determination of the title to a defendant’s property, but merely preserve[d] the status quo thereof pending determination of the principal action.” 37 Wis. 2d, at 169, 154 N. W. 2d, at 262. The court then relied on McInnes v. McKay, 127 Me. 110, 141 A. 699. That suit related to a Maine attachment law which, of course, is governed by the same rule as garnishment law. See “garnishment,” Bouvier’s Law Dictionary; see also Pennoyer v. Neff, 95 U. S.. 714. The Maine law was subjected to practically the same challenges that Brother Harlan and the Court raise against this Wisconsin law. About that law the Supreme Court of Maine said:

“But, although an attachment may, within the broad meaning of the preceding definition, deprive one of property, yet conditional and temporary as it is, and part of the legal remedy and procedure by which the property of a debtor may be taken in satisfaction of the debt, if judgment be recovered, we do not think it is the deprivation of property contemplated by the Constitution. And if it be, it is not a deprivation without ‘due process of law’ for it is a part of a process, which during its proceeding gives notice and opportunity for hearing and judgment of some judicial or other authorized tribunal. The requirements of ‘due process of law’ and ‘law of the land’ are satisfied.” 127 Me. 110, 116, 141 A. 699, 702-703.

This Court did not even consider the challenge to the Maine law worthy of a Court opinion but affirmed it in a per curiam, opinion, 279 U. S. 820, on the authority of two prior decisions of this Court. See also Standard Oil Co. v. Superior Court of New Castle County, 44 Del. *349538, 62 A. 2d 454, appeal dismissed, 336 U. S. 930; Harris v. Balk, 198 U. S. 215, 222, 227-228.

The Supreme Court of Wisconsin, in upholding the constitutionality of its law also cited the following statement of our Court made in Rothschild v. Knight, 184 U. S. 334, 341:

“To what actions the remedy of attachment may be given is for the legislature of a State to determine and its courts to decide . . .

Accord, Huron Holding Corp. v. Lincoln Mine Operating Co., 312 U. S. 183, 193.

The Supreme Court of Wisconsin properly pointed out:

“The ability to place a lien upon a man’s property, such as to temporarily deprive him of its beneficial use, without any judicial determination of probable cause dates back not only to medieval England but also to Roman times.” 37 Wis. 2d, at 171, 154 N. W. 2d, at 264.

The State Supreme Court then went on to point out a statement made by Mr. Justice Holmes in Jackman v. Rosenbaum Co., 260 U. S. 22, 31:

“The Fourteenth Amendment, itself a historical product, did not destroy history for the States and substitute mechanical compartments of law all exactly alike. If a thing has been practiced for two hundred years by common consent, it will need a strong case for the Fourteenth Amendment to affect it, as is well illustrated by Ownbey v. Morgan, 256 U. S. 94, 104, 112.”

The Ownbey case, which was one of the two cited by this Court in its per curiam affirmance of McInnes v. McKay, supra, sustained the constitutionality of a Delaware attachment law. And see Byrd v. Rector, 112 W. Va. 192, 163 S. E. 845.

*350I can only conclude that the Court is today overruling a number of its own decisions and abandoning the legal customs and practices in this country with reference to attachments and garnishments wholly on the ground that the garnishment laws of this kind are based on unwise policies of government which might some time in the future do injury to some individuals. In the first sentence of the argument in her brief, petitioner urges that this Wisconsin law “is contrary to public policy”; the Court apparently finds that a sufficient basis for holding it unconstitutional. This holding savors too much of the “Natural Law,” “Due Process,” “Shock-the-conscience” test of what is constitutional for me to agree to the decision. See my dissent in Adamson v. California, 332 U. S. 46, 68.

ADDENDUM.

The latest statement by my Brother Harlan on the power of this Court under the Due Process Clause to hold laws unconstitutional on the ground of the Justices’ view of “fundamental fairness” makes it necessary for me to add a few words in order that the differences between us be made absolutely clear. He now says that the Court’s idea of “fundamental fairness” is derived “not alone . . . from the specifics of the Constitution, but also . . . from concepts which are part of the Anglo-American legal heritage.” This view is consistent with that expressed by Mr. Justice Frankfurter in Rochin v. California that due process was to be determined by “those canons of decency and fairness which express the notions of justice of English-speaking peoples. . . .” 342 U. S. 165, 169. In any event, my Brother Harlan’s “Anglo-American legal heritage” is no more definite than the “notions of justice of English-speaking peoples” or the shock-the-conscience test. All of these so-called tests represent nothing more or less than an implicit adop*351tion of a Natural Law concept which under our system leaves to judges alone the power to decide what the Natural Law means. These so-called standards do not bind judges within any boundaries that can be precisely marked or defined by words for holding laws unconstitutional. On the contrary, these tests leave them wholly free to decide what they are convinced is right and fair. If the judges, in deciding whether laws are constitutional, are to be left only to the admonitions of their own consciences, why was it that the Founders gave us a written Constitution at all?

Mr. Justice Rehnquist

delivered the opinion of the Court.

The question presented by this litigation is whether a warehouseman's proposed sale of goods entrusted to him for storage, as permitted by New York Uniform Commercial Code § 7-210 (McKinney 1964) ,1 is an action properly attributable *152to the State of New York. The District Court found that the warehouseman’s conduct was not that of the State, and dismissed this suit for want of jurisdiction under 28 U. S. C. *153§ 1343 (3). 404 F. Supp. 1059 (SDNY 1975). The Court of Appeals for the Second Circuit, in reversing the judgment of the District Court, found sufficient state involvement with the proposed sale to invoke the provisions of the Due Process Clause of the Fourteenth Amendment. 553 F. 2d 764 (1977). We agree with the District Court, and we therefore reverse.

I

According to her complaint, the allegations of which we must accept as true, respondent Shirley Brooks and her family were evicted from their apartment in Mount Vernon, N. Y., on June 13, 1973. The city marshal arranged for Brooks’ possessions to be stored by petitioner Flagg Brothers, Inc., in its warehouse. Brooks was informed of the cost of moving and storage, and she instructed the workmen to proceed, although she found the price too high. On August 25, 1973, after a series of disputes over the validity of the charges being claimed by petitioner Flagg Brothers, Brooks received a letter demanding that her account be brought up to date within 10 days “or your furniture will be sold.” App. 13a. A series of subsequent letters from respondent and her attorneys produced no satisfaction.

Brooks thereupon initiated this class action in the District Court under 42 U. S. C. § 1983, seeking damages, an injunction against the threatened sale of her belongings, and the declaration that such a sale pursuant to § 7-210 would violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment. She was later joined in her action by Gloria Jones, another resident of Mount Vernon whose goods had been stored by Flagg Brothers following her eviction. *154The American Warehousemen’s Association and the International Association of Refrigerated Warehouses, Inc., moved to intervene as defendants, as did the Attorney General of New York and others seeking to defend the constitutionality of the challenged statute.2 On July 7, 1975, the District Court, relying primarily on our decision in Jackson v. Metropolitan Edison Co., 419 U. S. 345 (1974), dismissed the complaint for failure to state a claim for relief under § 1983.

A divided panel of the Court of Appeals reversed.3 The majority noted that Jackson had suggested that state action might be found in the exercise by a private party of “ ‘some - / *155power delegated to it by the State which is traditionally associated with sovereignty;’ ” 553 F. 2d, at 770, quoting 419 U. S., at 353. The majority found:

“[B]y enacting § 7-210, New York not only delegated to the warehouseman a portion of its sovereign monopoly power over binding conflict resolution [citations omitted], but also let him, by selling stored goods, execute a lien and thus perform a function which has traditionally been that of the sheriff.” 553 F. 2d, at 771.

The court, although recognizing that the Court of Appeals for the Ninth Circuit had reached a contrary conclusion in dealing with an identical California statute in Melara v. Kennedy, 541 F. 2d 802 (1976), concluded that this delegation of power constituted sufficient state action to support federal jurisdiction under 28 U. S. C. § 1343 (3). The dissenting judge found the reasoning of Melara persuasive.

We granted certiorari, 434 U. S. 817, to resolve the conflict over this provision of the Uniform Commercial Code, in effect in 49 States and the District of Columbia, and to address the important question it presents concerning the meaning of “state action” as that term is associated with the Fourteenth Amendment.4

II

A claim upon which relief may be granted to respondents against Flagg Brothers under § 1983 must embody at least two elements. Respondents are first bound to show that they have been deprived of a right “secured by the Constitution and the laws” of the United States. They must secondly show that Flagg Brothers deprived them of this right acting “under color of any statute” of the State of New York. It is clear that these two elements denote two separate areas of *156inquiry. Adickes v. S. H. Kress & Co., 398 U. S. 144, 150 (1970).

Respondents allege in their complaints that “the threatened sale of the goods pursuant to New York Uniform Commercial Code § 7-210” is an action under color of state law. App. 14a, 47a. We have previously noted, with respect to a private individual, that “[wjhatever else may also be necessary to show that a person has acted 'under color of [a] statute’ for purposes of § 1983, ... we think it essential that he act with the knowledge of and pursuant to that statute.” Adickes, supra, at 162 n. 23. Certainly, the complaints can be fairly read to allege such knowledge on the part of Flagg Brothers. However, we need not determine whether any further showing is necessary, since it is apparent that neither respondent has alleged facts which constitute a deprivation of any right “secured by the Constitution and laws” of the United States.

A moment’s reflection will clarify the essential distinction between the two elements of a § 1983 action. Some rights established either by the Constitution or by federal law are protected from both governmental and private deprivation. See, e. g., Jones v. Alfred H. Mayer Co., 392 U. S. 409, 422-424 (1968) (discussing 42 U. S. C. § 1982). ' Although a private person may cause a deprivation of such a right, he may be subjected to liability under § 1983 only when he does so under color of law. Cf. 392 U. S., at 424-425, and n. 33. However, most rights secured by the Constitution are protected only against infringement by governments. See, e. g., Jackson, 419 U. S., at 349; Civil Rights Cases, 109 U. S. 3, 17-18 (1883). Here, respondents allege that Flagg Brothers has deprived them of their right, secured by the Fourteenth Amendment, to be free from state deprivations of property without due process of law. Thus, they must establish not only that Flagg Brothers acted under color of the challenged statute, but also that its actions are properly attributable to the State of New York.

*157It must be noted that respondents have named no public officials as defendants in this action. The city marshal, who supervised their evictions, was dismissed from the case by the consent of all the parties.5 This total absence of overt official involvement plainly distinguishes this case from earlier decisions imposing procedural restrictions on creditors’ remedies such as North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601 (1975); Fuentes v. Shevin, 407 U. S. 67 (1972); Sniadach v. Family Finance Corp., 395 U. S. 337 (1969). In those cases, the Court was careful to point out that the dictates of the Due Process Clause “attac[h] only to the deprivation of an interest encompassed within the Fourteenth Amendment’s protection.” Fuentes, supra, at 84. While as a factual matter any person with sufficient physical power may deprive a person of his property, only a State or a private person whose action “may be fairly treated as that of the State itself,” Jackson, supra, at 351, may deprive him of “an interest encompassed within the Fourteenth Amendment’s protection,” Fuentes, supra, at 84. Thus, the only issue presented by this case is whether Flagg Brothers’ action may fairly be attributed to the State of New York. We conclude that it may not.

Ill

Respondents’ primary contention is that New York has delegated to Flagg Brothers a power “traditionally exclusively reserved to the State.” Jackson, supra, at 352. They argue that the resolution of private disputes is a traditional function of civil government, and that the State in § 7-210 has delegated this function to Flagg Brothers. Respondents, *158however, have read too much into the language of our previous cases. While many functions have been traditionally performed by governments, very few have been “exclusively reserved to the State.”

One such area has been elections. While the Constitution protects private rights of association and advocacy with regard to the election of public officials, our cases make it clear that the conduct of the elections themselves is an exclusively public function. This principle was established by a series of cases challenging the exclusion of blacks from participation in primary elections in Texas. Terry v. Adams, 345 U. S. 461 (1953); Smith v. Allwright, 321 U. S. 649 (1944); Nixon v. Condon, 286 U. S. 73 (1932). Although the rationale of these cases may be subject to some dispute,6 their scope is carefully defined. The doctrine does not reach to all forms of private political activity, but encompasses only state-regulated elections or- elections conducted by organizations which in practice produce “the uncontested choice of public officials.” Terry, supra, at 484 (Clark, J., concurring). As Mr. Justice Black described the situation in Terry, supra, at 469: “The only election that has counted in this Texas county for more than fifty years has been that held by the Jaybirds from which Negroes were excluded.” 7

A second line of cases under the public-function doctrine originated with Marsh v. Alabama, 326 U. S. 501 (1946). Just as the Texas Democratic Party in Smith and the Jaybird Democratic Association in Terry effectively performed the entire public function of selecting public officials, so too the *159Gulf Shipbuilding Corp. performed all the necessary municipal functions in the town of Chickasaw, Ala., which it owned. Under those circumstances, the Court concluded it was bound to recognize the right of a group of Jehovah's Witnesses to distribute religious literature on its streets. The Court expanded this municipal-function theory in Food Employees v. Logan Valley Plaza, Inc., 391 U. S. 308 (1968), to encompass the activities of a private shopping center. It did so over the vigorous dissent of Mr. Justice Black, the author of Marsh. As he described the basis of the Marsh decision:

“The question is, Under what circumstances can private property be treated as though it were public? The answer that Marsh gives is when that property has taken on all the attributes of a town, i. e., 'residential buildings, streets, a system of sewers, a sewage disposal plant and a “business block” on which business places are situated. 326 U. S., at 502.” 391 U. S., at 332 (dissenting opinion).

This Court ultimately adopted Mr. Justice Black's interpretation of the limited reach of Marsh in Hudgens v. NLRB, 424 U. S. 507 (1976), in which it announced the overruling of Logan Valley.

These two branches of the public-function doctrine have in common the feature of exclusivity.8 Although the elections held by the Democratic Party and its affiliates were the only meaningful elections in Texas, and the streets owned by the *160Gulf Shipbuilding Corp. were the only streets in Chickasaw, the proposed sale by Flagg Brothers under § 7-21Ó is not the only means of resolving this purely private dispute. Respondent Brooks has never alleged that state law barred her from seeking a waiver of Flagg Brothers' right to sell her goods at the time she authorized their storage. Presumably, respondent Jones, who alleges that she never authorized the storage of her goods, could have sought to replevy her goods at any time under state law. See N. Y. Civ. Prac. Law § 7101 et seq. (McKinney 1963). The challenged statute itself provides a damages remedy against the warehouseman for violations of its provisions. N. Y. U. C. C. § 7-210 (9) (McKinney 1964). This system of rights and remedies, recognizing the traditional place of private arrangements in ordering relationships in the commercial world,9 can hardly be said to have delegated to Flagg Brothers an exclusive prerogative of the sovereign.10

*161Whatever the particular remedies available under New York law, we do not consider a more detailed description of them necessary to our conclusion that the settlement of disputes between debtors and creditors is not traditionally an exclusive public function.11 Cf. United States v. Kras, 409 *162U. S. 434, 445-446 (1973). Creditors and debtors have had available to them historically a far wider number of choices than has one who would be an elected public official, or a member of Jehovah’s Witnesses who wished to distribute literature in Chickasaw", Ala., at the time Marsh was decided. Our analysis requires no parsing of the difference between various commercial liens and other remedies to support the conclusion that this entire field of activity is outside the scope of Terry and Marsh.12 This is true whether these commercial rights and remedies are created by statute or decisional law. To rely upon the historical antecedents of a *163particular practice would result in the constitutional condemnation in one State of a remedy found perfectly permissible in another. Compare Cox Bakeries v. Timm Moving & Storage, 554 F. 2d 356, 358-359 (CA8 1977), with Melara, 541 F. 2d, at 805-806, and n. 7. Cf. Bell v. Maryland, 378 U. S. 226, 334-335 (1964) (Black, J., dissenting).13

Thus, even if we were inclined to extend the sovereign-function doctrine outside of its present carefully confined bounds, the field of private commercial transactions would be a particularly inappropriate area into which to expand it. We conclude that our sovereign-function cases do not support a finding of state action here.

Our holding today impairs in no way the precedential value of such cases as Norwood v. Harrison, 413 U. S. 455 (1973), or Gilmore v. City of Montgomery, 417 U. S. 556 (1974), which arose in the context of state and municipal programs which benefited private schools engaging in racially discriminatory admissions practices following judicial decrees desegregating public school systems. And we would be remiss if we did not note that there are a number of state and municipal functions not covered by our election cases or governed by the reasoning of Marsh which have been administered with a greater degree of exclusivity by States and municipalities than has the function of so-called “dispute resolution.” Among these are such functions as education, fire and police protection, and tax collection.14 We express no view as to the extent, *164if any, to which a city or State might be free to delegate to private parties the performance of such functions and thereby avoid the strictures of the Fourteenth Amendment. The mere recitation of these possible permutations and combinations of factual situations suffices to caution us that their resolution should abide the necessity of deciding them.

IV

Respondents further urge that Flagg Brothers’ proposed action is properly attributable to the State because the State has authorized and encouraged it in enacting § 7-210. Our cases state “that a State is responsible for the . . . act of a private party when the State, by its law, has compelled the act.” Adickes, 398 U. S., at 170. This Court, however, has never held that a State’s mere acquiescence in a private action converts that action into that of the State. The Court rejected a similar argument in Jackson, 419 U. S., at 357:

“Approval by a state utility commission of such a request from a regulated utility, where the commission has not put its own weight on the side of the proposed practice by ordering it, does not transmute a practice initiated by the utility and approved by the commission into 'state action.’.” (Emphasis added.)

The clearest demonstration of this distinction appears in Moose Lodge No. 107 v. Irvis, 407 U. S. 163 (1972), which held that the Commonwealth of Pennsylvania, although not responsible for racial discrimination voluntarily practiced by a private club, could not by law require the club to- comply with its own discriminatory rules. These cases clearly rejected the notion that our prior cases permitted the imposition of Fourteenth Amendment restraints on private action by the simple device of characterizing the State’s inaction as “authoriza*165tion” or “encouragement.” See id., at 190 (Brennan, J., dissenting).

It is quite immaterial that the State has embodied its decision not to act in statutory form. If New York had no commercial statutes at all, its courts would still be faced with the decision whether to prohibit or to permit the sort of sale threatened here the first time an aggrieved bailor came before them for relief. A judicial decision to deny relief would be no less an “authorization” or “encouragement” • of that sale than the legislature’s decision embodied in this statute. It was recognized in the earliest interpretations of the Fourteenth Amendment “that a State may act through different agencies, — either by its legislative, its executive, or its judicial authorities; and the prohibitions of the amendment extend to all action of the State” infringing rights protected thereby. Virginia v. Rives, 100 U. S. 313, 318 (1880). If the mere denial of judicial relief is considered sufficient encouragement to make the State responsible for those private acts, all private deprivations of property would be converted into public acts whenever the State, for whatever reason, denies relief sought by the putative property owner.

Not only is this notion completely contrary to that “essential dichotomy,” Jackson, supra, at 349, between public and private acts, but it has been previously rejected by this Court. In Evans v. Abney, 396 U. S. 435, 458 (1970), our Brother Brennan in dissent contended that a Georgia statutory provision authorizing the establishment of trusts for racially restricted parks conferred a “special power” on testators taking advantage of the provision. The Court nevertheless concluded that the State of Georgia was in no way responsible for the purely private choice involved in that case. By the same token, the State of New York is in no way responsible for Flagg Brothers’ decision, a decision which the State in § 7-210 permits but does not compel, to threaten to' sell these respondents’ belongings.

*166Here, the State of New York has not compelled the sale of a bailor’s goods, but has merely announced the circumstances under which its courts will not interfere with a private sale. Indeed, the crux of respondents’ complaint is not that the State has acted, but that it has refused to act. This statutory refusal to act is no different in principle from an ordinary statute of limitations whereby the State declines to provide a remedy for private deprivations of property after the passage of a given period of time.

We conclude that the allegations of these complaints do not establish a violation of these respondents’ Fourteenth Amendment rights by either petitioner Flagg Brothers or the State of New York. The District Court properly concluded that their complaints failed to state a claim for relief under 42 U. S. C. § 1983. The judgment of the Court of Appeals holding otherwise is Reversed.

Mr. Justice Brennan took no part in the consideration or decision of these cases.

Mr. Justice Marshall,

dissenting.

Although I join my Brother Stevens’ dissenting opinion, I write separately to emphasize certain aspects of the majority opinion that I find particularly disturbing.

I cannot remain silent as the Court demonstrates, not for the first time, an attitude of callous indifference to the realities of life for the poor. See, e. g., Beal v. Doe, 432 U. S. 438, 455-457 (1977) (Marshall, J., dissenting); United States v. Kras, 409 U. S. 434, 458-460 (1973) (Marshall, J., dissenting). It blandly asserts that “respondent Jones . . . could have sought to replevy her goods at any time under state law.” Ante, at 160. In order to obtain replevin in New York, however, respondent Jones would first have had to present to a sheriff an “undertaking” from a surety by which the latter would be bound to pay “not less than twice the value” of the goods involved and perhaps substantially more, depending in *167part on the size of the potential judgment against the debtor. N. Y. Civ. Prac. Law § 7102 (e) (McKinney Supp. 1977). Sureties do not provide such bonds without receiving both a substantial payment in advance and some assurance of the debtor's ability to pay any judgment awarded.

Respondent Jones, according to her complaint, took home $87 per week from her job, had been evicted from her apartment, and faced a potential liability to the warehouseman of at least $335, an amount she could not afford. App. 44a-46a. The Court’s assumption that respondent would have been able to obtain a bond, and thus secure return of her household goods, must under the circumstances be regarded as highly questionable.* While the Court is technically correct that respondent “could have sought” replevin, it is also true that, given adequate funds, respondent could have paid her rent and remained in her apartment, thereby avoiding eviction and the seizure of her household goods by the warehouseman.. But we cannot close our eyes to the realities that led to this litigation. Just as respondent lacked the funds to prevent eviction, it seems clear that, once her goods were seized, she had no practical choice but to leave them with the warehouseman, where they were subject to forced sale for nonpayment of storage charges.

I am also troubled by the Court’s cavalier treatment of the place of historical factors in the “state action” inquiry. While we are, of course, not bound by what occurred centuries ago in England, see ante, at 163 n. 13, the test adopted by the Court itself requires us to decide what functions have been “traditionally exclusively reserved to the State,” Jackson v. Metropolitan Edison Co., 419 U. S. 345, 352 (1974) (emphasis added). Such an issue plainly cannot be resolved in a historical vacuum. New York’s highest court has stated that “[i]n *168[New York] the execution of a lien . . . traditionally has been the function of the Sheriff,” Blye v. Globe-Wernicke Realty Co., 33 N. Y. 2d 15, 20, 300 N. E. 2d 710, 713-714 (1973). Numerous other courts, in New York and elsewhere, have reached a similar conclusion. See, e. g., Sharrock v. Dell Buick-Cadillac, Inc., 56 App. Div. 2d 446, 455, 393 N. Y. S. 2d 166, 171 (1977) (“[T]he garageman in executing his lien ... is performing the traditional function of the Sheriff and is clothed with the authority of State law”); Parks v. “Mr. Ford,” 556 F. 2d 132, 141 (CA3 1977) (en banc) (“Pennsylvania has quite literally delegated to private individuals, [forced-sale] powers 'traditionally exclusively reserved’ to sheriffs and constables”); Cox Bakeries, Inc. v. Timm Moving & Storage, Inc., 554 F. 2d 356, 358 (CA8 1977) (Clark, J.) (by giving a warehouseman forced-sale powers, “the state has delegated the traditional roles of judge, jury and sheriff”); Hall v. Carson, 430 F. 2d 430, 439 (CA5 1970) (“The execution of a lien . . . has in Texas traditionally been the function of the Sheriff or constable”).

By ignoring this history, the Court approaches the question before us as if it can be decided without reference to the role that the State has always played in lien execution by forced sale. In so doing, the Court treats the State as if it were, to use the Court’s words, “a monolithic, abstract concept hovering in the legal stratosphere.” Ante, at 160 n. 10. The state-action doctrine, as developed in our past cases, requires that we come down to earth and decide the issue here with careful attention to the State’s traditional role.

I dissent.

Mr. Justice Stevens,

with whom Mr. Justice White and Mr. Justice Marshall join,

dissenting.

Respondents contend that petitioner Flagg Brothers’ proposed sale of their property to third parties will violate the Due Process Clause of the Fourteenth Amendment. Assum*169ing, arguendo, that the procedure to be followed would be inadequate if the sale were conducted by state officials, the Court holds that respondents have no federal protection because the case involves nothing more than a private deprivation of their property without due process of law.' In my judgment the Court’s holding is fundamentally inconsistent with, if not foreclosed by, our prior decisions which have imposed procedural restrictions on the State’s authorization of certain creditors’ remedies. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601; Fuentes v. Shevin, 407 U. S. 67; Sniadach v. Family Finance Corp., 395 U. S. 337.

There is no question in this case but that respondents have a property interest in the possessions that the warehouseman proposes to sell.1 It is also clear that, whatever power of sale the warehouseman has, it does not derive from the consent of the respondents.2 The claimed power derives solely from the State, and specifically from § 7-210 of the New York Uniform Commercial Code. The question is whether a state statute which authorizes a private party to deprive a person of his property without his consent must meet the requirements of the Due Process Clause of the Fourteenth Amendment. This question must be answered in the affirmative unless the State has virtually unlimited power to transfer interests in private property without any procedural protections.3

*170In determining that New York’s statute cannot be scrutinized under the Due Process Clause, the Court reasons that the warehouseman’s proposed sale is solely private action because the state statute “permits but does not compel” the sale, ante, at 165 (emphasis added), and because the warehouseman has not been delegated a power “exclusively reserved to the State,” ante, at 158 (emphasis added). Under this approach a State could enact laws authorizing private citizens to use self-help in countless situations without any possibility of federal challenge. A state statute could authorize the warehouseman to retain all proceeds of the lien sale, even if they far exceeded the amount of the alleged debt; it could authorize finance companies to enter private homes to repossess merchandise ; or indeed, it could authorize “any person with sufficient physical power,” ante, at 157, to acquire and sell the property of his weaker neighbor. An attempt to challenge the validity of any such outrageous statute would be defeated by the reasoning the Court uses today: The Court’s rationale would characterize action pursuant to such a statute as purely private action, which the State permits but does not compel, in an area not exclusively reserved to the State.

As these examples suggest, the distinctions between “permission” and “compulsion” on the one hand, and “exclusive” and “nonexclusive,” on the other, cannot be determinative factors in state-action analysis. There is no great chasm between “permission” and “compulsion” requiring particular state action to fall within one or the other definitional camp. Even Moose Lodge No. 107 v. Irvis, 407 U. S. 163, upon which the Court relies for its distinction between “permission” and *171“compulsion,” recognizes that there are many intervening levels of state involvement in private conduct that may support a finding of state action.4 In this case, the State of New York, by enacting § 7-210 of the Uniform Commercial Code, has acted in the most effective and unambiguous way a State can act. This section specifically authorizes petitioner Flagg Brothers to sell respondents’ possessions; it details the procedures that petitioner must follow; and it grants petitioner the power to convey good title to goods that are now owned by respondents to a third party.5

While Members of this Court have suggested that statutory authorization alone may be sufficient to establish state action,6 it is not necessary to rely on those suggestions in this case because New York has authorized the warehouseman to perform what is clearly a state function. The test of what is a state function for purposes of the Due Process Clause has been variously phrased. Most frequently the issue is presented in terms of whether the State has delegated a function traditionally and historically associated with sovereignty. See, e. g., Jackson v. Metropolitan Edison Co., 419 U. S. 345, 353; Evans v. Newton, 382 U. S. 296, 299. In this Court, petitioners have attempted to argue that the nonconsensual trans*172fer of property rights is not a traditional function of the sovereign. The overwhelming historical evidence is to the contrary, however,7 and the Court wisely does not adopt this position. Instead, the Court reasons that state action cannot be found because the State has not delegated to the warehouseman an exclusive sovereign function.8 This distinction, how*173ever, is not consistent with our prior decisions on state action;9 is not even adhered to by the Court in this case;10 and, most importantly, is inconsistent with the line of cases beginning with Sniadach v. Family Finance Corp., 395 U. S. 337.

Since Sniadach this Court has scrutinized various state statutes regulating the debtor-creditor relationship for compliance with the Due Process Clause. See also North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601; Mitchell v. W. T. Grant Co., 416 U. S. 600; Fuentes v. Shevin, 407 U. S. 67. In each of these cases a finding of state action was a prerequisite to the Court's decision. The Court today seeks to explain these findings on the ground that in each case there was some element of “overt official involvement.” Ante, at 157. Given the facts of those cases, this explanation is baffling. In North Georgia Finishing, for instance, the official involvement of the State of Georgia consisted of a court clerk who issued a writ of garnishment based solely on the affidavit of the creditor. 419 U. S., at 607. The clerk's actions were purely ministerial, and, until today, this Court had never held that purely minis*174terial acts of “minor governmental functionaries” were sufficient to establish state action.11 The suggestion that this was the basis for due process review in Sniadach, Shevin, and North Georgia Finishing marks a major and, in my judgment, unwise expansion of the state-action doctrine. The number of private actions in which a governmental functionary plays some ministerial role is legion;12 to base due process review on the fortuity of such governmental intervention would demean the majestic purposes of the Due Process Clause.

Instead, cases such as North Georgia Finishing must be viewed as reflecting this Court’s recognition of the significance of the State’s role in defining and controlling the debtor-creditor relationship. The Court’s language to this effect in the various debtor-creditor cases has been unequivocal. In Fuentes v. Shevin the Court stressed that the statutes in question “abdicate [d] effective state control over state power.” 407 U. S., at 93. And it is clear that what was of concern in Shevin was the private use of state power to achieve a non-consensual resolution of a commercial dispute. The state statutes placed the state power to repossess property in the hands of an interested private party, just as the state statute in this case places the state power to conduct judicially binding sales in satisfaction of a lien in the hands of the warehouseman.

“Private parties, serving their own private advantage, *175may unilaterally invoke state power to replevy goods from another. No state official participates in the decision to seek a writ; no state official reviews the basis for the claim to repossession; and no state official evaluates the need for immediate seizure. There is not even a requirement that the plaintiff provide any information to the court on these matters.” Ibid.

This same point was made, equally emphatically, in Mitchell v. W. T. Grant Co., supra, at 614-616, and North Georgia Finishing, supra, at 607. Yet the very defect that made the statutes in Shevin and North Georgia Finishing unconstitutional — lack of state control — is, under today’s decision, the factor that precludes constitutional review of the state statute. The Due Process Clause cannot command such incongruous results. If it is unconstitutional for a State to allow a private party to exercise a traditional state power because the state supervision of that power is purely mechanical, the State surely cannot immunize its actions from constitutional scrutiny by removing even the mechanical supervision.

Not only has the State removed its nominal supervision in this case,13 it has also authorized a private party to exercise a governmental power that is at least as significant as the power exercised in Shevin or North Georgia Finishing. In Shevin, the Florida statute allowed the debtor’s property to be seized and held pending the outcome of the creditor’s action for repossession. The property would not be finally disposed of until there was an adjudication of the underlying claim. Similarly, in North Georgia Finishing, the state statute provided for a garnishment procedure which deprived the debtor of the use of property in the garnishee’s hands pending the outcome of litigation. The warehouseman’s power under § 7-210 is far broader, as the Court of Appeals pointed out: *176“After giving the bailor specified notice, . . . the warehouseman is entitled to sell the stored goods in satisfaction of whatever he determines the storage charges to be. The warehouseman, unquestionably an interested party, is thus authorized by law to resolve any disputes over storage charges finally and unilaterally.” 553 F. 2d 764, 771.

Whether termed “traditional,” “exclusive,” or “significant,” the state power to order binding, nonconsensual resolution of a conflict between debtor and creditor is exactly the sort of power with which the Due Process Clause is concerned. And the State’s delegation of that power to a private party is, accordingly, subject to due process scrutiny. This, at the very least, is the teaching of Sniadach, Shevin, and North Georgia Finishing.

It is important to emphasize that, contrary to the Court’s apparent fears, this conclusion does not even remotely suggest that “all private deprivations of property [will] be converted into public acts whenever the State, for whatever reason, denies relief sought by the putative property owner.” Ante, at 165. The focus is not on the private deprivation but on the state authorization. “[W]hat is always vital to remember is that it is the state’s conduct, whether action or inaction, not the private conduct, that gives rise to constitutional attack.” Friendly, The Dartmouth College Case and The Public-Private Penumbra, 12 Texas Quarterly, No. 2, p. 17 (1969) (Supp.) (emphasis in original). The State’s conduct in this case takes the concrete form of a statutory enactment, and it is that statute that may be challenged.

My analysis in this case thus assumes that petitioner Flagg Brothers’ proposed sale will conform to the procedure specified by the state legislature and that respondents’ challenge therefore will be to the constitutionality of that process. It is only what the State itself has enacted that they may ask the federal court to review in a § 1983 case. If there should be a deviation from the state statute — such as a failure to give the *177notice required by the state law — the defect could be remedied by a state court and there would be no occasion for § 1983 relief. This point has been well established ever since this Court’s first explanations of the state-action doctrine in the Civil Bights Cases, 109 U. S. 3, 17:

“[CJivil rights, such as are guaranteed by the Constitution against State aggression, cannot be impaired by the wrongful acts of individuals, unsupported by State authority in the shape of laws, customs, or judicial or executive proceedings. The wrongful act of an individual, unsupported by any such authority, is simply a private wrong, or a crime of that individual; . . . but if not sanctioned in some way by the State, or not done under State authority, his rights remain in full force, and may presumably be vindicated by resort to the laws of the State for redress.” 14

On the other hand, if there is compliance with the New York statute, the state legislative action which enabled the deprivation to take place must be subject to constitutional challenge in a federal court.15 Under this approach, the federal courts do not have jurisdiction to review every foreclosure proceeding in which the debtor claims that there has been a procedural defect constituting a denial of due process of law. Rather, the federal district court’s jurisdiction under *178§ 1983 is limited to challenges to the constitutionality of the state procedure itself — challenges of the kind considered in North Georgia Finishing and Shevin.

Finally, it is obviously true that the overwhelming majority of disputes in our society are resolved in the private sphere. But it is no longer possible, if it ever was, to believe that a sharp line can be drawn between private and public actions.16 The Court today holds that our examination of state delegations of power should be limited to those rare instances where the State has ceded one of its “exclusive” powers. As indicated, I believe that this limitation is neither logical nor practical. More troubling, this description of what is state action does not even attempt to reflect the concerns of the Due Process Clause, for the state-action doctrine is, after all, merely one aspect of this broad constitutional protection.

In the broadest sense, we expect government “to provide a reasonable and fair framework of rules which facilitate commercial transactions . . . .” Mitchell v. W. T. Grant Co., 416 U. S., at 624 (Powell, J., concurring). This “framework of rules” is premised on the assumption that the State will control nonconsensual deprivations of property and that the State’s control will, in turn, be subject to the restrictions of the Due Process Clause.17 The power to order legally bind*179ing surrenders of property and the constitutional restrictions on that power are necessary correlatives in our system. In effect, today’s decision allows the State to divorce these two elements by the simple expedient of transferring the implementation of its policy to private parties. Because the Fourteenth Amendment does not countenance such a division of power and responsibility, I respectfully dissent.

RIPPLE, Circuit Judge.

Carl and Margaret Walker (“the Walkers”) brought this lawsuit against Wallace Auto Sales (“Wallace”) and Guardian National Acceptance Corporation (“Guardian”) on behalf of themselves and all others similarly situated. In their nine-count amended complaint, the Walkers alleged that the defendants systematically imposed hidden finance charges on automobile purchases in violation of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601-1693r, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 *929U.S.C. §§ 1961-1968, the Illinois Consumer Fraud Act, 815 ILCS 505/2, and the Illinois Sales Finance Agency Act, 205 ILCS 660/8.5. The district court dismissed the Walkers’ TILA claim because the conduct alleged by the Walkers did not constitute a violation of that Act. In addition, the court dismissed the Walkers’ remaining claims because, in its view, those claims could not survive in the absence of the TILA violation. For the reasons set forth in the following opinion, we reverse the district court’s dismissal of the Walkers’ TILA claim against Wallace, affirm its dismissal of the TILA claim against Guardian and remand the Walkers’ remaining claims to the district court for further consideration.

I

BACKGROUND

A. Facts1

On August 31,1995, the Walkers agreed to purchase a used 1989 Lincoln Continental from Wallace. In order to finance this purchase, the Walkers entered into a retail installment contract (“the contract”) with Wallace. The contract listed the cash price of the automobile as $14,040.2 In addition to that amount, the Walkers agreed to pay $699 for an extended warranty and $61 for license, title and taxes. The Walkers made a down payment of $1,500, leaving $13,300 as the amount to be financed on the sales contract. The Walkers agreed to finance this balance at an annual percentage rate of 25% over a period of four years (48 monthly installments of $441 each). Under these terms, the Walkers were to pay $7,868 in interest over the course of those four years, giving the sales contract a total value of $21,168. All of this information was clearly delineated on the face of the contract.

After the sale was complete, Wallace promptly assigned the contract to Guardian, “a specialized indirect consumer finance company engaged primarily in financing the purchase. of automobiles through the acquisition of retail installment contracts from automobile dealers.” R.21 ¶ 7. Guardian purchased the contract at a discount of $7,182 from the total value.

B. Proceedings in the District Court

As noted above, the Walkers filed a nine-count amended complaint against Wallace and Guardian in the district court alleging violations of TILA RICO and two state law consumer protection statutes. The gravamen of the Walkers’ complaint is that Wallace artificially inflated the cost of the vehicle to cover the discount at which Guardian purchased the Walkers’ sales contract and therefore imposed a “hidden finance charge” on them in violation of TILA, 15 U.S.C. § 1638(a)(3).3 This same allegation serves as the basis for the Walkers’ RICO and state law-based claims.

Wallace and Guardian filed a motion to dismiss the Walkers’ amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court first examined the Walkers’ TILA claim. The court began its analysis of that claim by noting that the regulations interpreting TILA’s disclosure requirements exempt specific charges from those requirements. Specifically, the Official Staff Commentary to the regulations provides that:

Charges absorbed by the creditor as a cost of doing business are not finance charges, even though the creditor may take such costs into consideration in determining the interest rate to be charged or the cash *930price of the property or services sold. However, if the creditor separately imposes a charge on the consumer to cover certain costs, the charge is a finance charge if it otherwise meets the definition.

12 C.F.R. Pt. 226, Supp. I at 308-09. The commentary further states that “[a] discount imposed on a credit obligation when it is assigned by a seller-creditor to another party is not a finance charge as long as the discount is not separately imposed on the consumer.” Id. In the district court’s view, the “hidden finance charge” alleged by the Walkers was in fact a “cost of doing business” and was therefore exempt from TILA’s disclosure requirements. The court therefore held that the Walkers had not pleaded sufficient facts to state a claim under TILA. In addition, the court dismissed the Walkers’ RICO and state law-based claims because, in its view, those claims could not survive in the absence of a TILA violation.

II

DISCUSSION

We review de novo the district court’s decision to dismiss, taking the Walkers’ factual allegations as true and drawing all reasonable inferences in their favor. See Kauthar SDN BHD v. Sternberg, 149 F.3d 659, 669-70 (7th Cir. 1998). In evaluating the Walkers’ complaint, we read them complaint as a whole, see Black v. Lane, 22 F.3d 1395, 1400 (7th Cir.1994), and shall affirm the district court’s order of dismissal only if “ ‘it appears beyond doubt that [the Walkers] can prove no set of facts in support of [their] claim which would entitle [them] to relief,’ ” Strasburger v. Board of Educ., 143 F.3d 351, 359 (7th Cir.1998) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).4

A. The Walkers’ TILA Claim

In order to assess the sufficiency of the Walkers’ TILA claim against Wallace and Guardian, we must first examine the statutory and regulatory framework under which it arises.

Congress enacted TILA “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair billing and credit card practices.” 15 U.S.C. § 1601(a); see also Gibson v. Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283, 285 (7th Cir.1997) (stating that TILA’s purpose is “to protect consumers from being misled about the cost of credit”); Brown v. Marquette Sav. & Loan Ass’n, 686 F.2d 608, 612 (7th Cir.1982) (stating that Congress enacted TILA to “provide information to facilitate comparative credit shopping and thereby the informed use of credit by consumers”). In order to effectuate this purpose, TILA requires creditors to disclose clearly and accurately to consumers any finance charge that the consumer will bear under the credit transaction. See 15 U.S.C. § 1638(a)(3). These stringent disclosure requirements are designed to prevent creditors from circumventing TILA’s objectives by burying the cost of credit in the price of the goods sold. See Mourning v. Family Publications Serv., Inc., 411 U.S. 356, 364, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); see also Gibson, 112 F.3d at 287 (stating that, under TILA, if merchant charges credit customers a higher “cash” price for an item than cash customers, then that extra charge is a finance charge and must be disclosed as such).

*931TILA defines a “finance charge” as the “sum of all charges, payable directly or indirectly by the person to whom the credit is extended, ■ and imposed directly or indirectly by the creditor as an incident to the extension of credit.” 15 U.S.C. § 1605(a). In addition, the regulations implementing TILA (known collectively as “Regulation Z”) provide that:

The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.

12 C.F.R. § 226.4(a). Regulation Z further provides that the term “finance charge” includes “[c]harges imposed on a creditor by another person for purchasing or accepting a consumer’s obligation, if the consumer is required to pay in cash, as an addition to the obligation, or as a deduction from the proceeds of the obligation.” Id. § 226.4(b)(6).

These provisions, however, are qualified by the Federal Reserve Board’s Official Staff Commentary to Regulation Z5 which exempts specific charges from TILA’s disclosure requirements:

Costs of doing business. Charges absorbed by the creditor as a cost of doing business are not finance charges, even though the creditor may take such costs into consideration in determining the interest rate to be charged or the cash price of the property or services sold. However, if the creditor separately imposes a charge on the consumer to cover certain costs, the charge is a finance charge if it otherwise meets the definition. For example:

A discount imposed on a credit obligation when it is assigned by a seller-creditor to another party is not a finance charge as long as the discount is not separately imposed on the consumer.

12 C.F.R. Pt. 226, Supp. I at 308-09.

In this case, the Walkers allege that the defendants violated TILA by artificially inflating the “cash price” of the vehicle purchased by the Walkers to cover the cost of the discount at which Guardian purchased the Walkers’ sales contract. The Walkers contend that, by passing on the cost of Guardian’s discount to the Walkers, the defendants imposed a “hidden finance charge” on them in violation of TILA, 15 U.S.C. § 1638(a)(3). The defendants, however, contend that the Walkers’ TILA claim must be dismissed because the “hidden finance charge” alleged by the Walkers was in fact a “cost of doing business” and was therefore exempt from TILA’s disclosure requirements. See 12 C.F.R. Pt. 226, Supp. I at 308-09.

As an initial matter, we note that, under TILA, Guardian may only be charged as an assignee, not a creditor. See 15 U.S.C. § 1602(f); 12 C.F.R. Pt. 226, Supp. I at 300. Accordingly, the Walkers must properly allege a cause of action against Wallace (the creditor) before it "can assert a claim against Guardian (the assignee). We therefore turn first to the issue of whether the Walkers’ amended complaint states a valid TILA claim against Wallace.

1. Wallace’s Liability

In paragraph 27 of the Walkers’ amended complaint, they allege that:

It is the standard policy of Wallace and other dealers who receive financing from Guardian to charge hidden finance charges on vehicles sold on time. The purported cash price of vehicles sold in this manner substantially exceeds the value of the vehicle, and the price at which comparable vehicles are sold for cash, and includes part of the finance charge.

R.21 ¶ 27. In the next paragraph, the Walkers further allege that this “hidden finance charge resulted from the need of [Wallace] to pass on to the consumer the discount imposed by Guardian.” Id, ¶ 28. It is our task to discern whether these allegations are sufficient to state a claim against Wallace under TILA.

*932As we noted above, TILA requires creditors to disclose clearly and accurately any finance charge that the consumer will bear in a particular credit transaction. As the definitions set forth above indicate, this means that a creditor-merchant must disclose to a consumer buying on credit exactly how much he will pay for that credit. See 12 C.F.R. § 226.4(a) (defining finance charge as “the cost of consumer credit as a dollar amount”). In this case, the Walkers allege that Wallace is charging higher prices to customers who are buying cars on credit than to customer who are paying cash. In other words, credit customers, such as the Walkers, are paying higher “cash” prices only because they are buying on credit. The higher cash price paid by these customers is therefore part of the cost of buying on credit. Under TILA, such a cost is a finance charge and must be disclosed to the consumer as such. Accordingly, wte conclude that the Walkers have alleged sufficient facts to state a cause of action against Wallace under TILA.

Our conclusion that the Walkers allege sufficient facts to state a cause of action under TILA is supported by the Supreme Court’s exposition of the concept and effect of a “hidden finance charge” in Mourning. In that case, the Court noted that “[o]ne means of circumventing the objectives of the Truth in Lending Act, as passed by Congress, was that of ‘burying’ the cost of credit in the price of goods sold.” Id. at 366, 93 5.Ct. 1652. The Court explained further that, in many credit transactions, creditors sought to evade TILA’s mandate by claiming that no finance charge had been charged and assuming “the cost of extending of credit as an expense of doing business, to be recouped as part of the price charged in the transaction.” Id. To illustrate this concept, the Court provided the following example:

[T]wo merchants might buy watches at wholesale for $20 which normally sell at retail for $40. Both might sell immediately to a consumer who agreed to pay $1 per week for 52 weeks. In one case, the merchant might claim that the price of the watch was $40 and that the remaining $12 constituted a charge for extending credit to the consumer. From the consumer’s point of view, the credit charge represents the cost which he must pay for the privilege of deferring payment of the debt he has incurred. From the creditor’s point of view, much simplified, the charge may represent the return which he might have earned had he been able to invest the proceeds from the sale of the watch from the date of the sale until the date of payment. The second merchant might claim that the price of the watch was $52 and that credit was free. The second merchant, like the first, has forgone the profits which he might have achieved by investing the sale proceeds from the day of the sale on. The second merchant may be said to have ‘buried’ this cost in the price of the item sold. By whatever name, the $12 differential between the total payments and the price at which the merchandise could have been acquired is the cost of deferring payment.

Id. at 366 n. 26, 93 S.Ct. 1652. The facts in this case are substantially similar to those in the Court’s hypothetical. Indeed, the Walkers allege that Wallace, like the second merchant, buried part of the cost of credit in the “cash” price.6 As the Court noted, this extra charge above the amount paid by a cash customer is “the cost of deferring payment.” Id. Under TILA, that cost must be disclosed as a finance charge.

Moreover, our conclusion is further strengthened by this court’s recent decision in Gibson v. Bob Watson Chevrolet-Geo, Inc., 112 F.3d 283 (7th Cir.1997). In that case, we consolidated three appeals from district court decisions dismissing claims that car dealers violated TILA by charging higher prices for warranties in credit transactions than in cash transactions. Specifically, the plaintiffs alleged that the difference between the price of the warranty in credit transactions and the *933price of the warranty in cash transactions constituted a finance charge that must be disclosed under TILA. In assessing the plaintiffs’ allegations, we concluded that the dealers’ alleged concealment of credit costs in the warranty price circumvented the objectives of TILA by preventing consumers from accurately gauging the cost of credit.7 Indeed, in reversing the district courts’ dismissals of plaintiffs’ lawsuits, we stressed that the dealers’ alleged conduct constituted the “type of fraud that goes to the heart of the concerns that actuate the Truth in Lending Act.” Id. The same can be said of Wallace’s alleged practices in this case. Instead of hiding the additional finance charges in the price of warranties, Wallace allegedly hid a portion of the finance charge in the “cash” price of the cars sold to credit customers. This fraud is no different from that alleged in Gibson—in both cases, the dealers allegedly misled the consumers about the true cost of buying on credit.

Wallace, however, contends that, even if we characterize the cost allegedly imposed on the Walkers and other credit customers as a finance charge, the particular type of charge involved here, “a discount imposed on a credit obligation when it is assigned by a seller-creditor to another party,” see 12 C.F.R. Pt. 226, Supp. I at 308-09, is exempt from TILA’s disclosure requirements. As we noted earlier, the Official Staff Commentary to Regulation Z exempts certain charges from TILA’s disclosure requirements:

Costs of doing business. Charges absorbed by the creditor as a cost of doing business are not finance charges, even though the creditor may take such costs into consideration in determining the interest rate to be charged or the cash price of the property or services sold. However, if the creditor separately imposes a charge on the consumer to cover certain costs, the charge is a finance charge if it otherwise meets the definition. For example:

A discount imposed on a credit obligation when it is assigned by a seller-creditor to another party is not a finance charge as long as the discount is not separately imposed on the consumer.

Id. This regulation makes clear that mer-chantcreditors are not necessarily required to disclose to consumers that they plan on selling the retail installment contract at a discount. However, if a creditor-merchant “separately imposes” the cost of the discount on the particular credit consumer, then that cost does not fit within the “cost of doing business” exemption, but rather is a finance charge and must be disclosed to the consumer as such. Therefore, the critical issue in this case is the meaning of the term “separately imposed” and whether Wallace's alleged conduct constitutes such a separate imposition.

In this case, the district court concluded that the Walkers failed to allege that Wallace “separately imposed” the cost of the discount on them. In the district court’s view, even if Wallace artificially inflated the “cash price” of the automobile sold to the Walkers to cover the cost of the discount imposed by Guardian, the discount was not “separately imposed” on the Walkers because those charges were included in the cash price of the car. We cannot accept the district court’s interpretation of the term “separately imposed.” Indeed, under the district court’s interpretation, a creditor would be allowed to impose a cost on consumers buying on credit without disclosing to those customers that they are paying more only because they are buying on credit.8 Ac-*934eeptance of this view would therefore eviscerate TILA’s’ stated purpose to “assure a meaningful disclosure of the credit terms so that the consumer will be able to compare more readily various credit terms available to him and avoid the uninformed use of credit.” 15 U.S.C. § 1601. By contrast, we believe that the term “separately imposed” must be interpreted in a manner consistent with TILA’s purpose of ensuring that consumers are informed fully of the costs of buying on credit. Accordingly, we hold that a charge should be considered “separately imposed” on a credit consumer when it is imposed in credit transactions but not in cash transactions.9

In their amended complaint, the Walkers allege that Wallace passed on the cost of the discount imposed by Guardian, that this cost was passed on in credit transactions only and that Wallace failed to disclose it as a finance charge. At this early stage in the proceedings, these allegations are sufficient to prevent the dismissal of the Walkers’ TILA claim against Wallace. In order to prevail in the end, however, the Walkers will have to prove their allegation that Wallace separately imposed the cost of Guardian’s discount on them. As we noted above, the commentary to Regulation Z makes it clear that it is permissible for a ear dealer to assign retail installment contracts to a finance company at a discount, without disclosing the discount to customers. See 12 C.F.R. Pt. 226, Supp. I at 30809. Moreover, the commentary specifically provides that a “charge directly or indirectly imposed by a creditor” is not considered to be a finance charge if the charge “is imposed uniformly in both cash and credit transactions.” 12 C.F.R. § 226.4(a) & Pt. 226, Supp. I at 308. Accordingly, Wallace need not disclose the cost of the discount as a finance charge if it attempts to recoup that cost by charging all customers higher prices. Under that scenario, the discounts would not be “separately imposed” on credit consumers like the Walkers, but, like any other overhead item, would be taken into account in the price of all vehicles sold.

Finally, in arriving at the holding we reach today, we stress that nothing in the law prevents a merchant-creditor from passing on the full cost of a discount imposed by an assignee to a credit purchaser. However, if the merchant-creditor chooses this route, TILA requires that it disclose that amount to the purchaser as a finance charge.

2. Guardian’s Liability

Because we have concluded that the Walkers have stated a claim against Wallace under TILA, we must consider whether they have stated a claim against Guardian.10 As we noted earlier, under TILA, Guardian may only be charged as an assignee, not a creditor. Section 131 of TILA, 15 U.S.C. § 1641, limits the liability of subsequent assignees to those situations in which the violation of TILA is “apparent on the face of the disclosure statement.” That section provides in pertinent part:

Liability of assignees

(a) Prerequisites

Except as otherwise specifically provided in this subchapter, any civil action for a violation of this subchapter or proceeding under section 1607 of this title which may be brought against a creditor may be *935maintained against any assignee of such creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to (1) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned, or (2) a disclosure which does not use the terms required to be used by this subchapter.

Id.

The Walkers advance two arguments as to why their amended complaint sufficiently states a TILA claim for assignee liability against Guardian. First, the Walkers contend that the limitations on assignee liability in § 131(a) are inapplicable in this case because Guardian is bound by the terms of the retail installment contract it purchased from Wallace. That contract repeats the language of the FTC’s Holder Notice (as 16 C.F.R. § 433.2 requires) which provides:

ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTORS-HALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.

Id. In the Walkers’ view, this provision subjects the holder (Guardian) to “all claims” which the consumer (the Walkers) has against the seller (Wallace), including violations of TILA. In the alternative, the Walkers assert that Guardian is liable under § 131 because Wallace’s violation of TILA is apparent on the face of the sales contract. Specifically, in their amended complaint, the Walkers allege that “Guardian is conscious of the fact that the dealer has a strong incentive to pass the discount onto the customer.” R.21 ¶ 9. The Walkers contend that this allegation, combined with their allegation that the purported “cash price” of the vehicle was substantially in excess of its true value, is sufficient to state a TILA claim for assignee liability against Guardian. In short, they maintain that, given Guardian’s knowledge of Wallace’s incentive to pass the cost of the discount on to its credit customers, Guardian could discern from the exorbitant “cash price” appearing on the face of the sales contract that Wallace had concealed a portion of the finance charge in the cash price.

We turn first to the Walkers’ contention that they may maintain a TILA action against Guardian due to the inclusion of the FTC’s Holder Notice in their contract with Wallace. In essence, the Walkers assert that, when Guardian accepted the assignment, it voluntarily waived any right to rely on the statutory defense provided by § 131(a). This court recently addressed this very issue in Taylor v. Quality Hyundai, Inc., 150 F.3d 689, 693 (7th Cir.1998). In that case, the court held that the inclusion of the FTC’s Holder Notice in a retail installment contract did not trump the clear command of § 131 that subsequent assignees can be held liable under TILA only when the violation is apparent on the face of the disclosure statement. See id. (citing Robbins v. Bentsen, 41 F.3d 1195, 1198 (7th Cir.1994) (“Regulations cannot trump the plain language of statutes.... ”)).

Given our conclusion that the inclusion of the FTC’s Holder Notice in the Walkers’ sale contract does not override the limitations on assignee liability in § 131, we turn to the Walkers’ contention that Guardian may nonetheless be held liable under § 131 because, given Guardian’s “knowledge” of Wallace’s practices, Wallace’s failure to disclose a portion of the finance charge was apparent on the face of the Walkers’ retail installment contract. Again, this contention is answered by Taylor. In that case, the plaintiffs argued “that the apparentness (or lack thereof) of a violation should be ascertained in light of the knowledge that a reasonable assignee similarly situated to the defendants should have.” Id. at 694. In the Taylor plaintiffs’ view, the assignees, “as active participants in the financing market,” know that creditors often hide finance charges in other items (in that case, the price of an extended warranty, in this case, the “cash price” of the automobile) and therefore *936must have known that the contracts issued to the plaintiffs contained hidden finance charges. The court rejected the plaintiffs’ argument and held that, under the plain wording of the statute, an assignee can be held Hable only if the violation is apparent on the face of the documents assigned. See id.

In addition to the argument based on Guardian’s knowledge of industry practices, the Walkers assert that the TILA violation was apparent on the face of the disclosure statement due to the fact that the “cash price” of the vehicle purchased by the Walkers was substantially in excess of the vehicle’s actual value. This argument is also without merit. One cannot assume that Guardian could tell from the face of the sales contract that the auto was overpriced; more importantly, even if Guardian did know that the vehicle was overpriced, such knowledge cannot be equated with knowledge that Wallace was burying a portion of the finance charge in the price of the vehicle.11

Finally, even if the Walkers’ amended complaint could be construed to allege that Guardian had actual knowledge of Wallace’s practice of disguising finance charges, such allegations are not sufficient, under the plain wording of the statute, to state a TILA claim for assignee liability against Guardian. Instead, the Walkers must allege that the violation was “apparent on the face” of the assigned documents. The Walkers do not, and cannot, make such an allegation. Accordingly, we hold that the Walkers have failed to state a TILA claim against Guardian.12

B. The Walkers’ RICO and State Law Based Claims

In addition to their TILA claim against Wallace and Guardian, the Walkers’ amended complaint contains eight other counts alleging that Wallace, Guardian and certain unnamed officers of those companies (“John Does 1-10”) violated RICO and two Illinois consumer protection statutes. As we noted earlier, these remaining counts are based on the same factual predicate as the Walkers’ TILA claim. Once the district court determined that the Walkers had failed to state a claim under TILA, it dismissed the remaining claims because, in its view, those claims could not survive in the absence of a TILA violation. The court did not independently assess the sufficiency of the Walkers’ allegations in the remaining counts.

Because the district court did not reach the issue of whether the plaintiffs’ remaining claims are viable and the parties have not briefed that issue on appeal, we remand that issue to the district court for its consideration in the first instance.13 In returning these counts to the district court, we also leave for that court’s consideration in the first instance the issue of whether, despite the fact that Guardian cannot be held liable as an assignee under TILA, the Walkers may still be able to allege that Guardian had a level of knowledge compatible with liability under RICO (Count II), the Ilhnois Consumer Fraud Act (Counts VII & VIII) and the Illinois Sales Finance Agency Act (Count IX).

*937Conclusion

We reverse the district court’s judgment dismissing the Walkers’ TILA claim (Count I) against Wallace, but affirm the dismissal of the TILA claim against Guardian. We also remand the remaining counts (Counts II through IX) to the district court for further consideration consistent with this opinion.

Affirmed in Part;

REVERSED AND REMANDED IN PART.

MEMORANDUM OPINION AND SCHEDULING ORDER

HADEN, District Judge.

Pending are the motions of all Defendants for summary judgment on all counts of Plaintiffs’ Second Amended Complaint.' For reasons discussed below, the motions are GRANTED in part and DENIED in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

As is necessary at summary judgment, the facts are presented in a light most favorable to the non-movant. Two former salesmen from Defendant Crown-Pontiac-Buick-GMC, Inc. (“Crown”), who handled what was called “special finance,” 1 Jeffrey Preece and Kenneth Burgess, testified that the processing of loans when working with Americredit Financial Services, Inc. (“Americredit”), was different than that used in auto sale and financing with other lenders. According to Preece and Burgess, Bob Bumpus, area manager of Amer-icredit, trained the two in this loan processing program.

*844The first step in the program involved advertising loans for used car buyers with weak credit. When potential customers responded, the special finance people like Preeee and Burgess first took the credit application and faxed it to Americredit. Sometimes Americredit approved the original application, in which case Crown looked for a car for which they could structure a deal within the approved monthly payment. More often than not, however, Americredit disapproved the initial application and the deal would have to be “rehashed,” which meant negotiating an acquisition fee, the amount Crown paid Americredit to finance the purchase, and making other adjustments in the application. Bumpus testified the acquisition fee was based on the customer’s credit worthiness: the greater the credit risk, the greater the fee. Bumpus testified the fees ranged from zero to four hundred ninety-five dollars ($495), but could be as high as eight hundred ninety-five ($895) and possibly a thousand dollars ($1000).

Bumpus trained Preeee and Burgess to include false downpayments on the applications, indicating customers had made a downpayment that, in fact, they were not required to make. In the Knapps’ case, for example, the documents indicated they had paid two thousand dollars ($2000) down. The truth was they made no down payment. Elsewhere Crown employees called this “funny money” or “Crown rebates” or “KBC” for “Kenny Burgess cash,” and they simply raised the stated car price to cover the false downpayment. The false downpayment also affected the acquisition fee. Burgess testified, “If [Bumpus] knew it was KBC, a lot of times he’d want a couple extra hundred dollars or sometimes as much as up to a thousand.” (Burgess Dep. at 22.)

During rehashing, customers’ paystubs were falsified to indicate more income and increase the apparent credit-worthiness of their application. Bumpus taught Burgess and Preeee to perform these operations and he worked with them to adjust each indicator until the customer’s credit appeared to score satisfactorily so Americre-dit could approve a car loan. Working with the resulting payment figure, Crown found a car the customer could “afford” to purchase within the payments Americredit required. The car price included the acquisition fee in every case, according to Burgess and Preeee.2 (See PL’s Resp. to Defs.’ Mot. for Summ. J., Ex. Burgess Dep. at 28, 84-85, 126; Preeee Dep. at 35-36.) Burgess quoted Crown General Manager Henry Marino saying, “[T]hese rats [Americredit], I’m not paying their damn fee.” (Id., Burgess Dep. at 83.)

According to Preeee and Burgess, the dealer would draw up the contract for the car purchase with Americredit as assignee for the customer to sign, but copies of the transaction documents were not sent to the customer until Americredit paid Crown. According to Preeee, “Henry [Marino] told me never to give them paperwork until we had received funding for the deal. Never give them copies of their paperwork until then.” (Id., Ex. Preeee Dep. at 32.) Burgess concurred: “[W]e wouldn’t give them copies of a contract until it was funded from Americredit because there may be an argument with Bumpus over a fee or something, that I couldn’t increase the price of the car to cover his fee enough.” (Id., Ex. Burgess Dep. at 27.) Burgess quoted Marino, “ [T]hem rats ain’t going to hang me on *845one of them.... I’m not giving them papers until I get my money.” (Id. at 28.)

When the Knapps responded to a radio advertisement for special financing at Crown, they completed a loan application and were told they were approved up to thirteen thousand dollars ($13,000). On February 1, 2001 they purchased a 1999 Pontiac Sunfire. The vehicle price was thirteen thousand ninety-one dollars and ninety-two cents ($13,091.92), including the false $2000 downpayment. The Knapps say they received copies of the contract and disclosure statement about March 2, 2001. Just above the signatures on the installment contract, a notice states, “BY SIGNING BELOW BUYER AGREES TO THE TERMS OF PAGES 1 AND 2 OF THIS CONTRACT AND ACKNOWLEDGES RECEIPT OF A COPY OF THIS CONTRACT.”

Plaintiffs’ Second Amended Complaint alleges the acquisition fee was hidden in the cash price of the vehicle. Because the fee was actually a hidden finance charge, Plaintiffs’ allege, it should have been, but was not included in the disclosure of the amount financed, as required by the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. Defendants also failed to provide disclosures required by TILA to consumers prior to consummation of the purchase and financing of the vehicle. In addition to the TILA claims, Plaintiffs allege state law claims based on the same activities for excessive finance charges, joint venture and conspiracy, unfair and deceptive acts or practices (“UDAP”), and fraud. According to the Complaint, Defendant Henry Marino directed the actions of the car dealer. Defendants have moved for summary judgment on all counts.

II. DISCUSSION

A. Summary Judgment Standard

Our Court of Appeals has often stated the settled standard and shifting burdens governing the disposition of a motion for summary judgment:

Rule 56(c) requires that the district court enter judgment against a party who, “after adequate time for ... discovery fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” To prevail on a motion for summary judgment, the [movant] must demonstrate that: (1) there is no genuine issue as to any material fact; and (2) it is entitled to judgment as a matter of law. In determining whether a genuine issue of material fact has been raised, we must construe all inferences in favor of the [nonmovant]. If, however, “the evidence is so one-sided that one party must prevail as a matter of law,” we must affirm the grant of summary judgment in that party’s favor. The [nonmovant] “cannot create a genuine issue of fact through mere speculation or the building of one inference upon another.” To survive [the motion], the [nonmovant] may not rest on [his] pleadings, but must demonstrate that specific, material facts exist that give rise to a genuine issue. As the Anderson [v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)] Court explained, the “mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff[.]”

Harleysville Mut. Ins. Co. v. Packer, 60 F.3d 1116, 1119-20 (4th Cir.1995) (citations omitted); Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir.), cert. denied, 513 U.S. 813, 115 S.Ct. 67, 130 L.Ed.2d 24 (1994); see also Cabro Foods, Inc. v. Wells Fargo Armored Serv. Corp., 962 F.Supp. 75, 77 (S.D.W.Va. *8461997); Spradling v. Blackburn, 919 F.Supp. 969, 974 (S.D.W.Va.1996).

“At bottom, the district court must determine whether the party opposing the motion for summary judgment has presented genuinely disputed facts which remain to be tried. If not, the district court may resolve the legal questions between the parties as a matter of law and enter judgment accordingly.” Thompson Everett, Inc. v. National Cable Adver., L.P. 57 F.3d 1317, 1323 (4th Cir.1995). It is through this analytical prism the Court evaluates the parties’ motions.

B. Count I: Hidden Finance Charge

1. Crown Liability

Congress enacted TILA “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair billing and credit card practices.” 15 U.S.C. § 1601(a). To this end, TILA requires creditors to disclose clearly and accurately to consumers any finance charge that the consumer will bear under the credit transaction. See 15 U.S.C. § 1638(a)(3). The disclosure requirements are designed to prevent creditors from circumventing TILA’s objectives by burying the cost of credit in the price of goods sold. See Mourning v. Family Publications Serv., Inc., 411 U.S. 356, 364, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973).

TILA defines the “finance charge” as the “sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.” 15 U.S.C. § 1605(a). Regulation Z, the compiled TILA implementing regulations, provides:

The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.

12 C.F.R. § 226.4(a). Further, Regulation Z provides the term “finance charge” includes “[cjharges imposed on a creditor by another person for purchasing or accepting a consumer’s obligation, if the consumer is required to pay in cash, as an addition to the obligation, or as a deduction from the proceeds of the obligation.” Id. § 226.4(b)(6).

Undisputed testimony shows Amer-icredit charged Crown an acquisition fee for funding customers’ retail automobile purchases. The acquisition fee was based on the customers’ credit-worthiness; the weaker the customer, the higher the fee. The fee for acquiring the Knapps’ credit purchase was $695. Clearly, the acquisition fee is a TILA finance charge, if the consumer is required to pay it. Both salesmen, Preece and Burgess, testified the acquisition fee was added to the price of every special finance car. (Burgess Dep. at 23; 84-85; Preece Dept. at 35-36.) Crown responds, however, that the acquisition fee was a cost of doing business, a cost that Crown paid to Americredit.

Such charges are exempted from TILA’s disclosure requirements by the Federal Reserve Board’s Official Staff Commentary to Regulation Z:3

*847Costs of Doing Business. Charges absorbed by the creditor as a cost of doing business are not finance charges, even though the creditor may take such costs into consideration in determining the interest rate to be charged or the cash price of the property or services sold. However, if the creditor separately imposes a charge on the consumer to cover certain costs, the charge is a finance charge if it otherwise meets the definition. For example:

A discount imposed on a credit obligation when it is assigned by a seller-creditor to another party is not a finance charge as long as the discount is not separately imposed on the consumer.

12 C.F.R. Pt. 226, Supp. I at 308-09 (emphasis added). Crown argues there is no evidence the acquisition fee was “separately imposed” upon the Knapps, to make it a finance charge.

Courts have variously interpreted “separately imposed.” For example, one court held, without discussion, that a discount was not separately imposed if it was included in the purchase price. See Sampson v. Mercury Fin. Co., 1996 WL 1057530 (M.D.Ala.1996). As the Seventh Circuit explained, however, in an extensive analysis, this practice would allow unscrupulous car dealers to evade TILA “by hiding a portion of the finance charge in the cash price of the vehicle.” Walker v. Wallace Auto Sales, Inc., 155 F.3d 927, 933, n. 8 (7th Cir.1998). For that reason, the Sampson account would contravene Mourning and the Supreme Court’s directive that creditors not be allowed to contravene TILA by burying the cost of credit in the price of goods. See also Irby-Greene v. M.O.R., Inc., 79 F.Supp.2d 630, 633 (E.D.Va.2000)(same).

Alternatively, Walker holds a charge should be considered “separately imposed” on a credit consumer “when it is imposed in credit transactions but not in cash transactions.” Id. at 934; see also Irby-Greene at 633 (cost is “separately imposed” if seller, to cover cost, would have charged a credit customer a higher price than a cash customer). Regulation Z supports this analysis, providing a charge imposed directly or indirectly by a creditor is not a finance charge, if it is “imposed uniformly in both cash and credit transactions.” 12 C.F.R. § 226.4(a) & Pt. 226, Supp. I at 308. This Court adopts the Seventh Circuit’s standard in Walker as reasonable, well analyzed, and supporting TILA’s purpose.

Salesmen Burgess and Preece testified the acquisition fee was determined based on the credit-worthiness of individual customers needing special financing and added into the price of whatever vehicle was then proposed to that customer. Crown disagrees, arguing the only credible evidence shows that the acquisition fee was treated as a cost of doing business. The automatic deposit slips provided by Ameri-credit to Crown show Americredit withheld the acquisition fee and paid the remainder of the amount financed to Crown. For example, the Knapps financed eleven thousand seventy-seven dollars and forty-two cents ($11,077.42) of which ten thousand, three hundred eighty-two dollars and forty-eight cents ($10,382.48) was -paid to Crown and six hundred ninety-five dollars ($695.00), the acquisition fee, was deducted and withheld by Americredit. In conjunction with the salesmen’s testimony that the acquisition fee was added into the price of every car sold with special financing by Americredit, a reasonable jury could interpret this transaction to show that the Knapps financed both the acquisition fee and the amount they paid Crown for their car.

*848This question of fact, whether Crown “separately imposed” the acquisition fee on credit customers precludes summary judgment on this issue. Crown’s motion for summary judgment on Count I is DENIED.

2. Americredit Liability

Plaintiffs assert Americredit is liable for TILA violations both as an assignee under TILA and as a principal and participant in the loan transaction. The cases relied upon, however, are either outdated or distinguishable. The relevant holding of Barber v. Kimbrell’s Inc., 577 F.2d 216, 220-21 (4th Cir.1978), the principal case that Plaintiffs cite, was abrogated by October 1, 1982 amendment of 12 C.F.R. § 226.2 removing the definition, “arranger of credit.” See 12 C.F.R. Pt. 226, Supp. I.

Under TILA, assignee liability for TILA disclosure violations is limited to violations “apparent on the face of the disclosure statement.” 15 U.S.C. § 1641(a). Such a violation includes “a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned.” Id. § 1641(a)(1). Plaintiffs argue examination of the other documents assigned, as in England v. MG Investments, Inc., 93 F.Supp.2d 718 (S.D.W.Va.2000), Hays v. Bankers Trust Co., 46 F.Supp.2d 490(S.D.W.Va.1999), and Herrara v. The North & Kimball Group, Inc., 2002 WL 253019 (N.D.Ill.2002), would have revealed the hidden finance charge. In each case, other documents assigned, for example, loan closing documents, revealed the discrepancy. Here, however, Plaintiffs identify no other documents assigned from which Americredit could have determined an inaccuracy.4

Americredit represents that, even if Crown did hide a finance charge in the price of the car and, ultimately in the amount financed, nothing on the face of documents assigned would indicate that fact to the assignee. Even if Preece and Burgess’ testimony that Americredit’s agent worked with them to determine the acquisition fee and then increase the car price is believed, that knowledge, imputable to Americredit, is nonetheless irrelevant. “An assignee’s sole duty under TILA is to examine the assigned documents for any irregularities, even if the assignee has knowledge that a creditor’s contracting practices may otherwise violate TILA.” Irby-Greene at 633 & n. 12. (citing Taylor v. Quality Hyundai, Inc., 150 F.3d 689, 694 (7th Cir.1998); Green v. Levis Motors, Inc., 179 F.3d 286, 295 (5th Cir.1999)(holding that an assignee has no duty to inquire beyond the face of the assigned documents); Ellis v. General Motors Acceptance Corp., 160 F.3d 703, 709 (11th Cir.1998)(holding that a plaintiff may not “resort to evidence or documents extraneous to the disclosure statement” to determine assignee liability under TILA))(other citation omitted).

Plaintiffs have presented no evidence of discrepancies, irregularities, or false statements that would be apparent on the face of documents assigned to Americredit and, accordingly, summary judgment is GRANTED to Americredit on Count I.

C. Count II: Failure to Provide Timely and Accurate TILA Disclosures

Count II alleges several TILA-re-quired disclosures were not made accu*849rately by Crown because of its failure to disclose the hidden finance charge. This allegation presumes there was a hidden finance charge, as discussed above. The questions of fact regarding the pricing of special finance automobiles and attribution of the acquisition fee, discussed above, also preclude summary judgment for Crown on this issue. Because Americredit is an as-signee, its TILA liability is limited to disclosure failures apparent on the face of the documents assigned, as discussed above, and because Plaintiffs have identified none, summary judgment is GRANTED to Am-ericredit on this portion of Count II.

Count II further alleges Defendants failed to declare the annual percentage rate and finance charge more conspicuously than all other disclosures except the creditor’s identity. See 15 U.S.C. § 1632(a); 12 C.F.R. § 226.17(a). The Court has examined the disclosure statement and notes this appears to be true. Conspicuity being a question of fact, however, final judgment will be reserved for a jury. If true, it is apparent on the face of the disclosure statements and so may be maintained against Americredit as against Crown. Defendants’ motion for summary judgment on this issue in Count II is DENIED.

Finally, Count II alleges Defendants failed to deliver the required disclosures in a form the consumer may keep prior to consummation. TILA requires the seller to disclose the terms of credit to the buyer. 15 U.S.C. § 1638(b)(1). Regulation Z specifies how the disclosure should be made:

(a) Form of disclosures.

(1) The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep.

(b) Time of disclosures. The creditor shall make disclosures before consummation of the transaction.

12 C.F.R. § 226.17. The Fourth Circuit recently held this regulation means the seller is “required to make the disclosures to [the buyer] in writing, in a form that he could keep, before consummation of the transaction.” Polk v. Crown Auto, Inc., 221 F.3d 691, 692 (4th Cir.2000).

The retail installment contract signed by the Knapps on February 1, 2001 states, just above the signatures, “BY SIGNING BELOW BUYER ... ACKNOWLEDGES RECEIPT OF A COPY OF THIS CONTRACT.” For purposes of assignee liability under TILA, Americredit may rely on the face of the contract including this acknowledgement, and its motion for summary judgment on this issue is GRANTED. For Crown, however, this acknowledgement only creates a rebuttable presumption of delivery, 15 U.S.C. § 1635(c), a presumption that cannot stand in the face of testimony that the Knapps left the office without the TILA disclosure form and did not actually receive it in a form they could keep until March 2001. Corroborative testimony from salesmen Preece and Burgess asserts it was the routine pattern and practice of Crown not to make disclosures available to customers in a form they could keep until after Americredit had paid Crown. Crown’s motion for summary judgment on this issue is DENIED.

D. Count III: Excessive Finance Charge

Count III alleges that the total disclosed finance charge of six thousand eight hundred eighty-four dollars and seventy-eight cents ($6,884.78) plus the undisclosed acquisition fee of six hundred ninety-five dollars ($695) violates West Virginia Code §§ 46A-3-101 to 104, which regulate fi*850nance charge rates or, in other words, is usurious. Plaintiffs allege the credit transactions with Americredit were consumer loans, rather than a loan incident to a consumer credit sale. On Plaintiffs’ account, because AmeriCredit’s agent Bob Bumpus participated with Crown in determining the financing, the seller is actually acting as an agent of the lender to sell the loan. If the transaction was a consumer loan rather than a consumer credit sale, the maximum interest rate of eighteen percent (18%) would apply, rather than twenty-five percent (25%) that applies to retail installment sales.5

In pertinent part, a “consumer credit sale” is a “sale of goods ... in which credit is granted ... by a seller who regularly engages as a seller in credit transactions of the same kind; ... the buyer is a person; ... the goods are purchased primarily for a personal, family [or] household purpose; ... the debt is payable in installments... and the amount financed does not exceed forty-five thousand dollars.” W. Va.Code § 46A-l-102(13)(a). A “consumer loan” is a “loan made by a person regularly engaged in the business of making loans,” the other conditions being the same. Id. at § 102(15).

Americredit first contends, as assignee it cannot be liable for any state violations because TILA preempts “inconsistent” state law. See 15 U.S.C. § 1610(a). Although Congress has acted comprehensively in the field of retail installment credit in the TILA, it has not seen fit to regulate interest rates in that field. Moreover, Congress expressly deferred to state authority. TILA provides pertinently:

Except as provided in section 1639 of this title [requirements for certain mortgages], this subchapter does not otherwise annul, alter or affect in any manner the meaning, scope or applicability of the laws of any State, including, but not limited to, laws relating to the types, amounts or rates of charges, or any element or elements of charges, permissible under such laws in connection with the extension or use of credit[.]

15 U.S.C. § 1610(b). TILA expressly does not preempt West Virginia usury law. See also Williams v. First Gov’t Mtge. & Investors Corp., 176 F.3d 497, 499-500 (D.C.Cir.1999)(TILA mandates disclosure of documents in lending transactions; states remain free to impose greater protections for borrowers, including substantive protections against unconscionable loan terms and provisions).

Plaintiffs’ claim in Count III is that Americredit actually sought to sell its consumer loan to the Knapps, so that the Knapps’ transaction with Crown was not actually a consumer credit sale. As summarized:

When all indicia are examined, the Am-ericredit process varies substantially from a standard auto purchase and financing transaction: The financing is the advertised commodity; the credit terms (including monthly payment) are dictated by Americredit; the loan is generally arranged before a vehicle is selected (then often selected by the seller rather than the buyer); the contract contain[s] expression of fees based on credit risk, pushing the contract higher than the rate permitted by law; there is splitting of profit between the seller and lender; Americredit is the owner of the contract (filled in with Americredit as assignee) prior to consummation by the consumer.

*851(Pls.’ Resp. to Defs.’ Mots: for Summ. J. at 16.)

Plaintiffs’ account ignores the-subject of the transaction, however. The Knapps purchased a 1999 Pontiac Sunfire. The car is the loan collateral. There is no evidence that, absent the car, the Knapps would have qualified for such a loan. The. Knapps responded to an advertisement for people with credit problems to purchase cars. They did not seek money, they sought a vehicle. The vehicle loan was not arranged before the vehicle was selected. Rather, the terms of an agreement under which Americredit would be willing to finance an automobile purchase by the Knapps were discussed. Burgess and Preece testified customers were shown several cars they could afford, given the financing for which they were eligible.6 The parties agree Americredit charged a fee based on credit risk, but whether the fee was paid by Crown or the Knapps is a question for the jury. However, even if the Knapps paid the acquisition fee, that does not change their car purchase into a consumer loan. On the facts presented, a reasonable jury could not find otherwise. Americredit’s motion for summary judgment on Count III is GRANTED.

E. Count V: Unfair and Deceptive Acts and Practices7

Count V alleges Defendants suppressed the pattern and practice of adding on. unauthorized charges for the hidden finance charge with the intention and purpose of deceiving Plaintiffs and so created a likelihood of confusion and misunderstanding. W. Va.Code § 46A-6-104.

Americredit responds that Section 1641(a) of TILA, which preempts inconsistent state law, provides a complete defense to West Virginia claims for unfair and deceptive acts and practices (UDAP) claims. In support, Americredit cites cases holding that Holder Rule clauses in contracts, that is, clauses that extend a debtor’s claims and defenses against a seller to the contract' holder, are inconsistent with assignee liability under TILA and thus preempted, pursuant to § 1641(a). See Alexiou v. Brad Benson Mitsubishi, 127 F.Supp.2d 557 (D.N.J.2000); Graham v. RRR, LLC, 202 F.Supp.2d 483 (E.D.Va.2002). However, Plaintiffs do not seek to hold Americredit liable as assignee via the contract’s holder clause. Rather, the lender’s liability is predicated upon the direct involvement of Americredit’s employee and agent, Bumpus, in the planning and execution of the scheme involving false pay stubs, false downpayments, and an acquisition fee.

Americredit next contends that UDAP statutes do not provide for derivative liability against those who do not deal directly with consumers. (Def. Americredit’s Mot. for Summ. J. at 18 (citing Texas, Illinois and Tennessee caselaw).) Again, Americredit’s alleged liability is not the derivative liability of an assignee. Ameri-credit’s potential liability derives from the actions of its agent Bumpus in allegedly planning, managing, and executing the scheme in which customers were dealt *852with by creation of false pay stubs, false downpayments, and charging an acquisition fee hidden in the vehicle price.

Finally, Americredit, Crown and Marino argue that Plaintiffs have failed to present evidence they have suffered the requisite “ascertainable loss... as a result of the use of’ the unfair act or practice of which they complain. (Id. at 19 (citing State of West Virginia v. Sec’y of Educ., 1993 WL 545730 at *14 (S.D.W.Va.1993); Orlando v. Finance One of West Virginia, Inc., 179 W.Va. 447, 453, 369 S.E.2d 882, 888 (1988)).) If, as Plaintiffs allege, the acquisition fee was hidden in the car price and amount financed. Plaintiffs at least paid state tax on the vehicle purchase in an excessive amount, which is an ascertainable loss.

For all these reasons, Defendant Ameri-credit and Crown’s motions for summary judgment on Count V, the UDAP claim, are DENIED.

F. Count VI: Fraud

Count VI alleges Defendants suppressed the pattern and practice of adding on unauthorized charges for a hidden finance charge, excessive sales tax and payments.8 The essential elements in an action for fraud are: “(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied upon it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied upon it.” Syl. Pt. 1, Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981). Fraudulent concealment involves the concealment of facts by one with knowledge or the means of knowledge, and a duty to disclose, coupled with an intention to mislead or defraud. Trafalgar House Constr., Inc. v. ZMM, Inc., 211 W.Va. 578, 567 S.E.2d 294, 300 (2002)(citing Silva v. Stevens, 156 Vt. 94, 589 A.2d 852, 857 (1991)).

Americredit claims the undisputed facts show that only Crown set the car price and, if the finance charge was hidden therein, it was hidden by Crown. Burgess, however, testified that Bumpus talked to him about the acquisition fee as a component of the price of the vehicle (Burgess dep. at 124), and that, although Bum-pus did not tell Burgess to put the fee into purchase price, he knew they were doing it. (Id. at 222.) Similarly, Preece testified Bumpus knew the acquisition fee was built into the cash price of the vehicle in every case. (Preece dep. at 37.) Because questions of fact preclude summary judgment on Count VI, Americredit and Crown’s motions for summary judgment on this count are DENIED.

G. Count TV: Joint Venture/Conspiracy

Count IV alleges the Defendants engaged in a joint venture or conspiracy to commit the unlawful acts complained in Counts I through VI. A civil conspiracy is “a combination of two or more persons by concerted action to accomplish an unlawful purpose or to accomplish some purpose, not in itself unlawful, by unlawful means.” Salmons v. Prudential Ins. Co. of Am., 48 F.Supp.2d 620, 625 (S.D.W.Va.1999)(citing Dixon v. Am. Indus. Leasing Co., 162 W.Va. 832, 834, 253 S.E.2d 150, 152 (1979)).

As demonstrated above, for each count which remains, testimony of Burgess and Preece supports Plaintiffs’ allegations that Bumpus trained the two in the schemes and worked with them to carry out cre*853ation of false paystubs, false downpay-ments, and charging an acquisition fee in addition to interest of twenty-one percent (in the Knapps’ case), which Bumpus knew Preece and Burgess were including in the cash price of the vehicle. These questions must be put to a jury and, accordingly, Defendants’ motion for summary judgment on Count IV is DENIED.

H. Henry Marino

Defendant Marino was the General Manager of Crown throughout the time period of the wrongful activities alleged. Burgess and Preece testified that Marino knew about and participated in all the special financing activities. In particular, testimony of the salesmen supports that Marino oversaw and approved the hiding of the acquisition fee in the cash price of the vehicle.

Marino argues he is not a “creditor” or person to whom the debt is payable under 15 U.S.C. § 1602(f) and so is not liable for TILA violations because it is the creditor who is required to make TILA disclosures. See e.g., 15 U.S.C. § 1638(a). While the Court agrees that Crown and not Marino is the creditor and subject to TILA liability, Marino is not insulated from liability on the state claims that remain. Marino’s motion to dismiss himself as an individual Defendant is DENIED.

III. CONCLUSION

Americredit’s motion for summary judgment on Counts I, II (except for conspicuousness of the disclosures), and III is GRANTED. Americredit’s motion for summary judgment on the remaining counts is DENIED. Crown’s motion for summary judgment on all counts is DENIED. Marino’s motion for summary judgment on Counts I, II, and III is GRANTED; however, summary judgment on Counts IV, V, and VT is DENIED.

A status conference is SCHEDULED for Monday, February 24, 2003 at 3:00 p.m. Parties who wish to participate by telephone should inform the Court by Friday, February 21, 2003.

The Clerk is directed to send a copy of this Order to counsel of record and post it on the Court’s website: http://www.wvsd.uscourts.gov

OPINION

CHARLES D. SUSANO, JR., J.,

delivered the opinion of the court,

in which HERSCHEL P. FRANKS, P.J., and D. MICHAEL SWINEY, J„ joined.

This is a class action lawsuit filed by a consumer, Patrick Beaudreau, against a car dealer, Larry Hill Pontiac/Oldsmobile/GMC, Inc. (“Hill Pontiac”). Beau-dreau purchased an automobile from Hill Pontiac and the purchase was financed through General Motors Acceptance Corporation (“GMAC”).1 Beaudreau alleges, inter alia, that Hill Pontiac violated the Tennessee Consumer Protection Act (“the TCPA”) and the Tennessee Trade Practices Act (“the TTPA”) in that it failed to reveal to Beaudreau that it had an arrangement with GMAC by the terms of which Hill Pontiac received a portion of the interest rate charged to Beaudreau. The trial court dismissed Beaudreau’s claims. Beaudreau appeals. We affirm.

I.

On April 12, 1999, Beaudreau agreed to purchase an automobile from Hill Pontiac in Sevierville. In order to purchase the vehicle, Beaudreau obtained financing— with the help of Hill Pontiac representatives — through GMAC. The Hill Pontiac representatives informed Beaudreau that the financing would be subject to a per annum interest rate of 13.5%, which Beau-dreau accepted. Sometime later, Beau-dreau learned that GMAC had quoted Hill Pontiac an interest rate of 11.25% and that Hill Pontiac had added 2.25% to that rate, thus arriving at the 13.5% interest rate. This practice of a car dealer receiving a certain percentage of the financing it arranges for its customers is commonly referred to as the “dealer reserve” or a “dealer participation” agreement.

On March 8, 2000, Beaudreau filed a complaint against Hill Pontiac, alleging that Hill Pontiac’s practice of dealer reserve violated the TCPA. As additional grounds, Beaudreau raised the issues of unjust enrichment, money had and received, and civil conspiracy, among others. In his complaint, Beaudreau sought class certification for all Hill Pontiac customers similarly situated.

Hill Pontiac moved (1) to dismiss the complaint for failure to state a claim, or, in *876the alternative, (2) for a more definite statement. The trial court granted the motion for a more definite statement and took the motion to dismiss under advisement.

Beaudreau filed his first amended complaint on April 10, 2001, and two months later, Hill Pontiac renewed its motion to dismiss, alleging that the amended complaint still failed to state a claim. The trial court orally denied the motion, but it did not enter an order memorializing its action. Subsequently, Hill Pontiac filed an answer to the amended complaint, denying that it was liable to Beaudreau under any of his several theories of recovery.

In September, 2002, Beaudreau moved to certify the proposed class of Hill Pontiac customers, and on November 12, 2002, Beaudreau filed a motion requesting permission to file a second amended class action complaint. The trial court held a hearing on Beaudreau’s motions on November 14, 2002. At that time, the trial court noted that it had never entered an order denying Hill Pontiac’s renewed motion to dismiss. The court went on to state that, after reviewing applicable case law, it had reconsidered its previous ruling. It then granted Hill Pontiac’s motion to dismiss. The court did, however, grant the plaintiffs motion to file a second amended complaint. These rulings were confirmed by an order filed January 31, 2003.

On March 20, 2003, the trial court filed a supplement to its previous order, in which it offered an explanation for its rationale in granting the motion to dismiss. Finding that the cases relied upon by Beaudreau were easily distinguishable from his case, and holding that an unpublished California trial court opinion provided good insight, the trial court reasoned that there was nothing unlawful about the practice of dealer reserve.

From this ruling, Beaudreau appeals.

II.

As previously stated, the trial court granted Hill Pontiac’s motion to dismiss Beaudreau’s claims. Hill Pontiac’s motion was premised on the failure of the complaint to state a claim upon which relief can be granted. See Tenn. R. Civ. P. 12.02(6). “Such a motion challenges the legal sufficiency of the complaint.” Trau-Med of Am., Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 696 (Tenn.2002). Our role on this appeal is clear. We “must construe the complaint liberally, presum[e] all factual allegations to be true and giv[e] the plaintiff the benefit of all reasonable inferences.” Id. A complaint should be dismissed only if “it appears that the plaintiff can prove no set of facts in support of [its] claim that would entitle [it] to relief.” Cook v. Spinnaker’s of Rivergate, Inc., 878 S.W.2d 934, 938 (Tenn.1994). Our review is de novo with no presumption of correctness attaching to the trial court’s judgment, Trau-Med, 71 S.W.3d at 696-97, because the question before us is one of law: Does the complaint state a cause of action?

III.

The plaintiff raises four issues on appeal, which can be succinctly stated as follows:

1. Did the trial court err in finding that Beaudreau faded to state a cause of action under the TCPA?

2. Did the trial court err in finding that Beaudreau failed to state a cause of action for civil conspiracy?

3. Did the trial court err in finding that Beaudreau failed to state a cause of action under the TTPA?

4. Did the trial court err in finding that Beaudreau failed to state a cause of action for unjust enrichment and/or money had and received?

*877IV.

A.

Beaudreau first asserts that the trial court erred in finding that he failed to state a cause of action under the TCPA. Specifically, Beaudreau claims that Hill Pontiac had a duty to disclose the “real” interest rate, ie., the 11.25% rate, to him. We disagree.

The TCPA was enacted, in part, “[t]o protect consumers ... from those who engage in unfair or deceptive acts or practices in the conduct of any trade or commerce ... within this state.” Tenn.Code Ann. § 47-18-102(2) (2001). Beaudreau alleges that Hill Pontiac’s practice of “secretly inflating the real interest rates consumers are charged when financing their car purchases” is a deceptive practice under the meaning of the TCPA and is thus unlawful. (Emphasis in original omitted). See TenmCode Ann. § 47-18-104(b)(27) (Supp.2003) (stating that engaging in an act that is deceptive to the consumer is unlawful). In support of his position, Beaudreau points to the following allegations in his second amended complaint:

During the course of the transaction, [Beaudreau] was told by Hill Pontiac representatives that financing for him could and would be arranged by Hill Pontiac through GMAC “at the lowest rates offered” by GMAC. Financing of [Beaudreau’s] vehicle was ultimately provided by GMAC. When the Hill Pontiac representative, who at all times was acting as [Beaudreau’s] agent, returned with what he characterized as “the best rate they could give us,” [Beaudreau] believed he had negotiated the “best rate” with GMAC on his behalf.

However, Hill Pontiac secretly, and without [Beaudreau’s] knowledge, added 2.25 percentage points to [Beaudreau’s] real interest rate (consequently arriving at the 13.50% rate). [Beaudreau] was specifically told by Hill Pontiac representatives, including the salesman and finance department personnel, that Hill Pontiac had dealt with GMAC on [Beau-dreau’s] behalf and that the 13.50% rate was the best rate GMAC could offer. However, Hill Pontiac knew GMAC had agreed to finance [Beaudreau’s] purchase at a rate lower than 13.50%, which would have consequently led to lower monthly payments.

[Beaudreau] was never told and did not understand that Hill Pontiac was going to receive any of the 13.5% interest rate that he was charged. The real interest rate was never disclosed to [Beaudreau], Specifically, [Beaudreau] also did not know that the interest rate at which the automobile was financed — and which he paid — was secretly inflated by and for the economic benefit of Hill Pontiac by utilizing the dealer reserve scheme described herein.

GMAC arranges for its automobile dealers to act as intermediaries between the consumer and GMAC in order to finance the sale of automobiles. This arrangement is set out in a “dealer participation” agreement between Hill Pontiac and GMAC. According to the agreement between GMAC and Hill Pontiac, the dealership is specifically authorized by GMAC to overcharge consumers by inflating the interest rate charged.

(Numbering in original omitted) (emphasis in original).

This is an issue of first impression in Tennessee. While the issue of dealer reserve was involved in the case of Pyburn v. Bill Heard Chevrolet, 63 S.W.3d 351 (Tenn.Ct.App.2001), that case centered solely on the issue of an arbitration agreement; the issue of whether the practice of dealer reserve violated the TCPA was never reached. Beaudreau relies upon the unreported case of Adkinson v. Harpeth Ford-Mercury, Inc., No. 01A01-9009-*878CH00332, 1991 WL 17177 (Tenn.Ct.App. M.S., filed February 15,1991), in which the concept of dealer reserve, among many other issues, was involved. In Adkinson, the court made the following finding with respect to dealer reserve:

We are also of the opinion that under the circumstances it was proper for the jury to base a finding of unfair or deceptive acts and practices on the evidence at trial which shows that Harpeth kept for itself 2.5% of the 16.5% annual percentage rate financing which plaintiff was led to believe was charged by [Ford Motor Credit Company] to finance the transaction. Harpeth told plaintiff that FMCC was financing the transaction but failed to disclose to plaintiff that it had secretly imposed the 2.5% additional charge.

Id., at *7 (emphasis added). Relying upon this language, Beaudreau advances the position that the Court of Appeals has “specifically held that the practice [of dealer reserve] ... violates the TCPA.” However, Beaudreau overlooks the limiting language of “under the circumstances.” In Adkin-son, the court found evidence of oral misrepresentations that induced the plaintiff into signing a written contract, as well as evidence that the dealership “used high-pressure tactics” to pressure the plaintiff into purchasing a car when she simply wanted to pay off her lease of the vehicle. Id. Based upon these events, the court went on to find that “[t]here is substantial material evidence that Harpeth engaged in unfair or deceptive acts or practices under the [TCPA] and that it also made negligent misrepresentations to plaintiff.” Id. The court did state that the jury could have based its findings on the “deceptive act” of dealer reserve — under the circumstances of the case, which included numerous acts which were clearly deceptive under the TCPA. Id. Indeed, this court has previously interpreted this language to mean that “a dealer’s failure to disclose ‘dealer reserve’ was actionable when the dealer engaged in a pattern of deceptive conduct.” Harvey v. Ford Motor Credit Co., 8 S.W.3d 273, 275 (Tenn.Ct.App.1999) (emphasis added). By contrast, there are no allegations of such deceptive or misleading acts in the instant case — the only allegation is that Hill Pontiac engaged in the practice of dealer reserve. We find that the facts in Adkinson are distinguishable from those in the case at bar. Accordingly, we conclude that Adkinson does not have precedential value in the instant case.

Beaudreau also relies upon another unreported case, Baggett v. Crown Auto. Group, Inc., No. 01A01-9110-CV00401, 1992 WL 108710 (Tenn.Ct.App. M.S., filed May 22, 1992), to support his position that the practice of dealer reserve is unlawful. This case contains evidence of the dealership engaging in egregious fraudulent conduct, which included the dealership making alterations to the original sales contract without the plaintiffs knowledge. Id., at *7. When the plaintiff signed the sales contract on the purchase of his automobile, he agreed to an annual percentage rate of 14.75%. Id., at *3. However, when the dealership realized that Ford Motor Credit Company was not going to approve the financing on the terms agreed upon by the plaintiff and the dealership, the dealership unilaterally increased the annual percentage rate to 15.3% in order to obtain the financing. Id., at *3-*5. The dealership then induced the plaintiffs wife to sign a new contract, in the absence of the plaintiff, without telling her of the changes in the contract. Id., at *4-*5. This court held that increasing the interest rate without informing the plaintiff constituted an unfair or deceptive act as contemplated by the TCPA. Id., at *10., However, the actions by the dealership in increasing the rate of interest in the Baggett case do not constitute the practice of dealer reserve *879such as we have in the instant case. Further, as in Adkinson, the actions of the dealership in Baggett were clearly deceptive, as well as fraudulent. We have no such conduct in the case at bar.

The only other instance in which dealer reserve has been addressed in Tennessee is in the case of Harvey v. Ford Motor Credit Co., 8 S.W.3d 273 (Tenn.Ct.App.1999), in which we held that the plaintiffs complaint did not state a cause of action against Ford Motor Credit Company for a violation of the TCPA, based upon the practice of dealer reserve. Id. at 276. Because the plaintiff filed suit against the automotive financing company only and not the dealership involved, we did not reach the issue of the dealership’s liability, if any, for engaging in the practice of dealer reserve. Id. However, in our opinion on Harvey’s petition for rehearing, this court held as follows:

Although the Amended Complaint alleges that the plaintiff was “required to pay hidden fees,” he was clearly informed of the total interest rate, which he was free to accept or reject. Regardless of how payment was allocated between the dealer and defendant, the plaintiff was aware of what his overall payment and total interest rate would be.

Harvey v. Ford Motor Credit Co., No. 03A01-9807-CV-00235, 1999 WL 486894, at *2 (Tenn.Ct.App. E.S., filed July 13, 1999). The court went on to point out that the plaintiff was “free to seek financing from other sources.” Id. There is no allegation in the instant case that Hill Pontiac prevented Beaudreau from considering other financing options.

Because there is no case that is squarely on point in Tennessee, we have looked to the case law outside of our jurisdiction for guidance. While our research has revealed that only a handful of jurisdictions have addressed the legality of dealer reserve, the cases in those jurisdictions are indeed instructive.

The United States Court of Appeals for the Seventh Circuit addressed the issue of dealer reserve in the context of the plaintiffs allegation that the dealership was acting as his agent when it arranged the financing:

[A]n automobile dealer is not its customers’ agent, obviously not in selling cars but only a little less obviously in arranging financing. If the buyer pays cash and arranges his own financing, the dealer is not in the picture at all. If the buyer wants to buy on credit, he recognizes that his decision does not change the arms’ length nature of his relation to the dealer. He knows, or at least has no reason to doubt, that the dealer seeks a profit on the financing as well as on the underlying sale.

[Tjhere is no suggestion that the dealer here represented that he would act as the buyer’s agent in dealing with the finance company, no indication therefore that an agency relationship was created. If there were such a relationship it would mean that the buyer could tell the dealer to shop the retail sales contract among finance companies and to disclose the various offers the dealer obtained to him, and no one dealing with an automobile dealer expects that kind of service.

Bolderos v. City Chevrolet, 214 F.3d 849, 853-54 (7th Cir.2000).

The Alabama Supreme Court adopted similar reasoning when it addressed the issue of dealer reserve:

Although this case specifically involves lenders and interest rates, interest is nothing other than the cost or price of borrowing money. The [dealer reserve] agreement at issue here is nothing more than [the dealership’s] profit on the loan *880transaction, which had a wholesale price and a retail price. We decline to recognize a common law duty that would require the seller of a good or service, absent special circumstances, to reveal to its purchaser a detailed breakdown of how the seller derived the sales price of the good or service, including the amount of profit to be earned on the sale.

Ex parte Ford Motor Credit Co., 717 So.2d 781, 787 (Ala.1997) (internal citation omitted).

Finally, the California Court of Appeal has made the following statements with respect to the legality of dealer reserve:

The [plaintiffs] effectively assert that payment of the dealer reserve is deceptive merely because it is not disclosed to consumers. However, disclosure is not required by law, and indeed the Federal Reserve Board long ago rejected the proposition that such disclosure would be useful to consumers.2 Moreover, the [plaintiffs] allege no facts suggesting why a reasonable person would believe that the financing rate in his or her contract with the dealer is the same rate at which a lender would make a direct loan. Indeed, a reasonable person would likely believe the opposite; the Federal Reserve Board thought so, and several courts have agreed.... Accordingly, we conclude payment of the dealer reserve as alleged in the complaints does not constitute a fraudulent business practice.

The claim that consumers pay higher interest rates than they would if no dealer commission existed may be true, but that is scarcely unfair. Dealers, like any other retailer, seek a profit on the credit services they provide. We are compelled to agree with [the defendant] that the “unfair” prong of the unfair competition law was not intended to eliminate retailers’ profits by requiring them to sell at their cost, whether the product is automobiles or automobile financing. In short, we discern no offense to public policy, and no unfairness to be weighed. Payment of the dealer reserve is not an unfair practice under the unfair competition law.

Kunert v. Mission Fin. Servs. Corp., 110 Cal.App.4th 242, 1 Cal.Rptr.3d 589, 606-607 (2003) (internal citations omitted); see also Getter v. Onyx Acceptance Corp., No. 728614, 2001 WL 1711313, at *2, *6 (Cal. Superior, filed November 13, 2001) (noting that the practice of dealer reserve has been “an integral part of the indirect auto finance market since at least the 1960’s” and finding that dealer reserve does not constitute an unfair or deceptive business practice).

We find the approach to dealer reserve followed by these other jurisdictions *881to be well-reasoned and adopt it as our own. Each of the aforementioned cases holds, in essence, that a reasonable consumer should be aware that a for-profit retailer, in arranging for financing for a consumer, would expect to receive some sort of remuneration for its efforts; that the consumer is free to seek financing elsewhere if he or she is unhappy with the terms quoted by the dealer; that the practice of dealer reserve need not be disclosed to the consumer, as previously found by the Federal Reserve Board; and that the practice of dealer reserve is in no way unlawful. It appears that this court was contemplating a similar reasoning in Harvey, when it noted that the plaintiff was “free to accept or reject” the quoted interest rate and that the plaintiff was no doubt aware of the total payment and interest rate. Harvey, 1999 WL 486894, at *2.

There is no factual predicate in the complaint before us which gives rise to a legal duty on Hill Pontiac to disclose to the plaintiff that it is to receive a portion of the interest charged by GMAC. The plaintiff was aware that his contract called for interest at the rate of 13.5% per annum. There is nothing in the complaint indicating that this information or the amount of his monthly payment was hidden from him. Regardless of whether GMAC was to receive all or only a portion of the stated interest of 13.5%, the fact remains that the plaintiff knew that he was paying 13.5% interest to borrow the money to finance the purchase of his car. He was, at all times, free to reject GMAC financing and look elsewhere for a loan to pay for his vehicle.

Accordingly, we find, in the instant case, that Hill Pontiac’s dealer participation agreement with GMAC does not constitute a deceptive act or practice and that Hill Pontiac had no duty to disclose the existence of the agreement to Beaudreau. We conclude that the practice of dealer reserve, standing alone, does not violate the TCPA.

M

Beaudreau next contends that the trial court erred in finding that he had not stated a cause of action for civil conspiracy. A civil conspiracy is a “combination between two or more persons to accomplish by concert an unlawful purpose, or to accomplish a purpose not in itself unlawful by unlawful means” Chenault v. Walker, 36 S.W.3d 45, 52 (Tenn.2001) (quoting Dale v. Thomas H. Temple Co., 186 Tenn. 69, 208 S.W.2d 344, 353 (1948)). In the case at bar, Beaudreau alleges that Hill Pontiac conspired with GMAC to “purposely conceal the practice by which Hill Pontiac is paid a ‘kickback’ by [GMAC and other lenders].” Because we hold that the practice of dealer reserve does not have “an unlawful- purpose” or constitute the accomplishment of a lawful purpose “by unlawful means” — an essential element of a civil conspiracy claim — we find this issue to be without merit.

C.

Next, Beaudreau argues that the trial court erred in finding that he failed to state a claim under the TTPA. With respect to this issue, Beaudreau specifically asserts that Hill Pontiac conspired with lenders “to lessen competition and/or to advance the costs of auto financing.”

The TTPA provides, in pertinent part, as follows

All arrangements, contracts, agreements, trusts, or combinations between persons or corporations made with a view to lessen, or which tend to lessen, full and free competition in the importation or sale of articles imported into this state, or in the manufacture or sale of articles of domestic growth or of domestic raw material, and all arrangements, *882contracts, agreements, trusts, or combinations between persons or corporations designed, or which tend, to advance, reduce, or control the price or the cost to the producer or the consumer of any such product or article, are declared to be against public policy, unlawful, and void.

TenmCode Ann. § 47-25-101 (2001) (emphasis added).

Despite Beaudreau’s attempts to argue that Hill Pontiac provided a product when it arranged the financing for Beaudreau’s automobile, the transaction at issue clearly involves a service. This court has previously held that the TTPA is not applicable to workers’ compensation insurance premiums, “which [are] an intangible contract right or service” rather than a product or article. Jo Ann Forman, Inc. v. Nat’l Council on Comp. Ins., Inc., 13 S.W.3d 365, 373 (Tenn.Ct.App.1999); see also McAdoo Contractors, Inc. v. Harris, 222 Tenn. 623, 439 S.W.2d 594, 597 (1969) (holding that the TTPA does not apply to the award of a building construction contract). Likewise, the arranging of financing constitutes a service, not a product. We therefore hold that the TTPA has no applicability in the instant case. Furthermore, even if the arranging of financing was deemed to fall under the purview of the TTPA — and we do not believe that it does — we find that the practice of dealer reserve is not an arrangement made to lessen “full and free competition,” as contemplated by the statute.

D.

Finally, Beaudreau contends that the trial court erred in finding that he had not stated a cause of action for unjust enrichment and/or money had or received. We disagree.

In order to recover under a theory of unjust enrichment, the plaintiff must prove the following:

A benefit conferred upon the defendant by the plaintiff, appreciation by the defendant of such benefit, and acceptance of such benefit under such circumstances that it would be inequitable for him to retain the benefit without payment of the value thereof.

Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 155 (1966). While the first two prongs of this test have been satisfied, Beaudreau cannot prove that it would be inequitable for Hill Pontiac to retain the 2.25% dealer reserve commission. Indeed, as discussed earlier in this opinion, a consumer cannot expect a dealership to assist that consumer in obtaining financing without receiving some sort of payment for its services. Under the circumstances, we cannot say that it was inequitable for Hill Pontiac to retain the 2.25% dealer reserve.

With respect to the claim of money had and received, such an action “may be maintained where one receives money or its equivalent under such circumstances that in equity and good conscience he ought not to retain and in justice and fairness it belongs to another.” Steelman v. Ford Motor Credit Co., 911 S.W.2d 720, 724 (Tenn.Ct.App.1995) (citing Interstate Life & Accident Co. v. Cook, 19 Tenn.App. 290, 86 S.W.2d 887, 891 (1935)). Again, we find that there is nothing inequitable in allowing Hill Pontiac to retain the dealer reserve. Accordingly, Beaudreau’s claims for unjust enrichment and money had and received must fail.

V.

Hill Pontiac raises two issues, asserting further bases for upholding the trial court’s judgment. Specifically, Hill Pontiac asserts that (1) the transaction in question was in full compliance with the Truth In Lending Act; and (2) the transaction in question complied with the statutes gov*883erning retail installment sales contracts and the sale of commercial paper. We have looked at these matters in a cursory fashion, but as we have previously found that the issues raised by Beaudreau are dispositive of this appeal, we do not need to reach Hill Pontiac’s issues. Accordingly, we will not address them.

VI.

The judgment of the trial court is affirmed. This case is remanded to the circuit court for collection of costs assessed below, pursuant to applicable law. Costs on appeal are taxed to the appellant, Patrick Beaudreau.