Rent-A-Center to pay $15.5 mln to settle California consumer claims (updated)

Upbound

02/08/2022 20:36

(Adds details from settlement papers, California attorney
general comment, byline)
    By Jonathan Stempel
    Aug 2 (Reuters) - Rent-A-Center Inc  RCII.O , a large
furniture and electronics rent-to-own company, will pay $15.5
million to settle charges it violated California consumer
protection laws by unlawfully leasing items and engaging in
deceptive marketing.
    The settlement announced on Tuesday by California Attorney
General Rob Bonta calls for Rent-A-Center to pay a $2 million
civil fine and $13.5 million in restitution to consumers.
    Bonta said Rent-A-Center had since 2014 overcharged
consumers by imposing a 15% cash price markup on "Preferred
Leases" offered in kiosks inside traditional retail stores.
    He also said the Plano, Texas-based company misled consumers
about their rental agreements, including their right to return
merchandise at any time with no penalty.
    Rent-A-Center did not admit wrongdoing in agreeing to
settle. The company did not immediately respond to requests for
comment.
    Tuesday's accord bars Rent-a-Center from charging the
markups and limiting returns.
    “Furnishing a home is expensive, and consumers often hope
rent-to-own agreements will lessen the cost," Bonta said in a
statement. "We won't stand by when a company like Rent-A-Center
overcharges these hardworking Californians, taking money that is
needed for rent, food, or other essential expenses."
    Rent-to-own agreements typically let lower-income and
cash-strapped consumers lease household items, and retain
ownership after making the required weekly or monthly payments.
    While consumers can often stop making payments and return
the items, the arrangement can leave them paying significantly
more https://consumer.ftc.gov/articles/rent-own-lease-own-layaway-and-buying-over-time#understand
 than if they bought the items upfront.
    According to its annual report, Rent-a-Center ended 2021
with 2,435 stores in the United States, Puerto Rico and Mexico. 

 (Reporting by Jonathan Stempel in New York; Editing by Chris
Reese and Matthew Lewis)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))