5 Million Consumers Deceived in Rent-to-Own Lending Scheme

Rent-a-Center affiliate charged with deception, illegal lending

A consumer finance company affiliated with Rent-A-Center is facing charges that it misled or deceived as many as 5 million of its customers and that it engaged in illegal lending practices.

The Consumer Financial Protection Bureau (CFPB) is charging Acima (a finance company acquired by Rent-A-Center) with deceptive and illegal practices in violation of the Consumer Financial Protection Act.

“The CFPB is suing Acima and its founder for intentionally designing its credit product to trick customers and evade federal consumer financial protection laws,” said CFPB Director Rohit Chopra. “The defendants used deceptive digital dark patterns and other online tricks to obscure key terms and conditions.”

Acima Holdings and its subsidiary, Acima Digital, are two point-of-sale financing companies based in Utah.

Acima offers a financing product, which it purports to be a lease or “virtual rent-to-own” product, in 46 states. Acima’s financing product is primarily for durable household goods.

Acima's product, marketed as a lease or "rent-to-own," opportunity, was essentially a credit product. Consumers would qualify for credit with Acima and choose goods for purchase. Acima would purchase the goods, deliver them to consumers, and consumers would pay Acima on a monthly, installment basis.

Acima's markups for the service were at times up to 200% of the item's retail cost.

The CFPB complaint alleges that Acima used deceptive marketing, engaged in lending at rates that exceeded legal limits, and created terms and conditions that made it nearly impossible for customers to terminate a loan.

The regulator is asking that customers be reimbursed and that Acima be made to pay a civil money penalty for its illegal actions.

Photo byChristian KaindlonUnsplash