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Rent-to-own companies gouge low-income consumers, suits say.

Publication: Trial
Publication Date: 01-JUL-05 		Format: Online - approximately 793 words
Delivery: Immediate Online Access

Article Excerpt
Rent-to-own companies such as Rent-A-Center have come under fire recently for preying on low-income consumers and circumventing consumer protection laws. By treating their contracts as leases rather than installment sales or small loans, consumer advocates say, they avoid complying with usury ceilings and laws that require interest rates to be disclosed, such as the Truth in Lending Act.

Through these companies, people typically rent household items like televisions and furniture at low weekly or monthly payments, with the option to buy. Consumers can terminate the lease at any time and return the item. However, the interest rates they pay along the way can be higher than 200 percent, critics say.

For example: "Consumers are promised a dream of...

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