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Rent to Own

Rent-to-own stores allow consumers to rent or buy major household items over time with small monthly, weekly or biweekly payments, often as little as $10 to $20.  The rental contracts typically run from one to two years, usually with the intention that the consumer will own the product at the end of that period if they make all the payments.  But unlike a traditional layaway or similar plans, the customer gets use of the item right away.  There's no credit check, and consumers can terminate the rental at any time, with no further obligation.  The stores will deliver, install or pick up the merchandise, and also provide maintenance and repair.  That has made them affordable and attractive to low-income consumers and those who can't qualify for credit cards or traditional payment plans.  Many of the customers have little choice for necessities like a refrigerator or bed, because they can't afford to buy them outright.

Access to these items comes at a high price, however.  Current New York State law allows rent-to-own businesses to charge up to 480% of the business’ own cost for these goods.  It is often true that if a consumer misses even one payment, the contract is voided, all payments toward ownership are forfeited, and the item is reclaimed by the store.  All rent-to-own transactions in New York State are effectively insulated from consumer lawsuits, so it is very hard for a consumer who has been harmed by a rent-to-own transaction to get a fair hearing. (Source: Buffalo News, 8/9/2010)

 



ARTICLES

Top Ten Ways The CFPB Can Help You With Financial Questions
The U.S. PIRG Education Fund has put together this great resource of how the CFPB can help you. It includes information on how to make complaints to the CFPB. Read More

Best Buy May Offer Rent-to-Own Option (The Wall Street Journal - Market Watch)
Best Buy Co.is preparing a pilot program to offer electronics through a unit of Rent-A-Center Inc., employees of the rent-to-own company and analysts say. Read More

The New Rent to Own Law: History Repeats as Both Tragedy and Farce
Found predominantly in low income neighborhoods, rent-to-own stores have grown from a small fringe business into a major consumer industry, with about 8,600 stores nationwide used by six million consumers, and generating $7 billion in annual revenue. Read More


Rent to Own: Articles



IN THE NEWS

The Future of Wall Street Regulation Is in Andrew Cuomo's Hands
New York Governor Andrew Cuomo must soon appoint a replacement superintendent for the state Department of Financial Services (DFS), an obscure regulatory position that the current head, Benjamin Lawsky, elevated into a major national player over the past four years. Read More

Rent-A-Center CEO: New Consumer Bureau Won't Have Authority Over Us
Consumer advocates say that the high interest rates that Rent-a-Center effectively charges are no different from the sky-high terms offered by payday lenders. Now, some are looking to Richard Cordray, recently installed at the helm of the newly created Consumer Financial Protection Bureau, to rein in the retailer. Read More


Rent to Own: In the News



POLICY ADVOCACY

Empire Justice Memo of Support: Provide Consumer Protections in the Rent-to-Own Industry
This legislation will have a real and substantial effect on low income consumers seeking to rent or purchase essential family appliances, furniture, and related items from RTO stores operating in New York State. Read More





NEWSLETTERS

Legal Services Journal - Spring 2011
The spring 2011 issue area of the LSJ has a special focus on Consumer and Community Development issues. You will also find an article on "Policy News", "Settlement in Class Action Application Delays Case in Nassau" and "21st Century SSA.. Read More





RESOURCES

Top Ten Ways The CFPB Can Help You With Financial Questions
The U.S. PIRG Education Fund has put together this great resource of how the CFPB can help you. It includes information on how to make complaints to the CFPB. Read More