FURNITURE RENTAL STORES ARE PREDATORY LENDERS The multi-billion dollar rent-to-own industry sells televisions, appliances, computers, jewelry and furniture by making consumers loans payable on a weekly or a monthly basis. A television with a market value of $200 typically requires 78 weekly payments of $15.99, or a total of $1247.22. A customer who rents-to-own or purchases will pay finance charges at an imputed annual percentage rate (APR) of 220% or more. But the industry contends it does not sell. It claims it only rents, because if a consumer wants to stop making payments, he or she can do so and return the goods without further payments. RTO stores generally refuse to comply with state usury ceilings or interest rate disclosure laws such as the Truth In Lending Act. The industry, over the years, has also been accused of selling used goods as new, tacking on deceptive add-on fees and worse, bullying and sometimes illegal tactics when consumers are late with payments. Over ten years ago, RTO operators convinced about 45 states to enact weak legislation that treats rent-to-own as a lease. Yet, several states -- backed by consumer groups -- insist on treating rent-to-own sales as small loans, requiring compliance with usury ceilings (New Jersey), APR disclosures (Vermont), or other consumer protection provisions (Minnesota, Wisconsin, North Carolina.
Posted on: Wed, 14 Jan 2015 21:11:38 +0000
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