Tens of thousands of California consumers are eligible for restitution following a settlement between the California Department of Justice and Rent-A-Center, a rent-to-own furniture and electronics store, prosecutors said.
State Attorney General Rob Bonta announced the $15.5 million settlement. More than $13 million will go to consumers who entered into certain lease agreements with Rent-A-Center.
The state investigation centered on Rent-A-Center’s kiosk business, which operates in retail stores like Ashley Furniture, the complaint says. Prosecutors allege that the “cash price” Rent-A-Center charged Rent-A-Center customers was 15 percent higher than the retail price a retailer like Ashley Furniture charged, in violation of the Karnette Rental-Purchase Act, California’s rent-to-own law.
That bumped up a consumer’s costs by hundreds of dollars possibly, prosecutors said.
“Rent-A-Center repeatedly relied on deceptive tactics to pad its pockets,” Bonta said at a news conference announcing the settlement. “The company broke the law.”
Rent-A-Center also allegedly misled buyers about the basic aspects of the lease, such as their right to return products without a penalty. The lease agreements, called Preferred Lease agreements, were formerly known as AcceptanceNOW, according to the Department of Justice.
Bonta said the settlement will prevent Rent-A-Center from continuing its unlawful conduct.
As part of the agreement with the California Department of Justice, Rent-A-Center must train its employees about the terms of the settlement and the Karnette Act.
Rent-A-Center must charge the same price to Preferred Lease customers as retailers charge their customers. Rent-A-Center must allow returns without preventing or limiting them in any way.
The company must make clear to customers that its Preferred Lease agreement is a rent-to-own transaction and give each customer a document telling them the key terms of the agreement.
Rent-A-Center must submit annual reports to Bonta’s office on the company’s work to comply with the settlement. Rent-A-Center must pay $2 million in civil penalties.
Rent-A-Center customers who are eligible for restitution will get a notice in the mail at their last known address.
A spokesperson for Rent-A-Center did not respond to a request for comment on the settlement.
California apparently doesn’t want competition when it comes to fleecing the flock. Ain’t gonna be no more RTO shenanigans, but that train that runs from Nowhere to I-Don’t-Wanna-Go-There is still getting public funding despite the bait & switch of the original ballot measure.
Go get ’em, Gavie.
Get this TV for $99 down, $99 a month, for 99 years.
this isn’t anything new…
I’ve a relative; young at the time, started working for a Rent-A-Center over 25 years ago in Washington State… Realizing the sham; they gave notice after the 3rd day. R-A-C said that’s ok, we’ll waive the 2 week notice.
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All of RAC’s customers were ignorant, uneducated idiots who didn’t understand basic finance.
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Their stupidity is of their own making and deserve NOTHING.
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New furniture is a scam. Buy it pre-owned on Craigslist or wherever. Look for death, divorce or destitution. The deals are insane and literally 1/4 the price of new stuff.
They get by with this because too many people failed math classes.
I guess a good analogy is renting vs buying a house. Yes I pay more per day renting, Comparing price to rent and buy is not always applicable. There is probably a cost of taking back rented furniture (cleaning etc) that RTO wanted to hedge.
They cater to the young adults, who are uninformed, and ignorant. These young adults think they know everything, even though they haven’t been on this earth long enough to gain much wisdom. They spend all their money on the latest iPhones, sneakers, Starbucks, and tattoos, but they cannot afford to buy furniture or a new TV.
What ever happened to people shopping carefully and being responsible for what they buy? I’m obviously not in favor of people getting ripped off, but this is another example of why California is losing so many businesses.
Scam ripoff business for people who don’t/didn’t see that they being fleeced. More and more, the government is becoming the mommy for the dumb masses.
Regardless of how poor at math you are, RTO has no right fleecing the public.