Pay Now, Pay Later
Rent-A-Center has a model for getting poor people to blow hundreds on installment purchases. Step one: Charge 400 percent interest.
In the four-bedroom Brooklyn apartment Maria Motta shared with her three sons, her mother, her cousin, and a lodger, there was no place to sit. In fact, there was no furniture at all, aside from two double beds for the boys and a couple of inflatable mattresses for the adults. Since migrating from Mexico to New York City in 1980, Motta worked alongside her mother cleaning houses, but at the end of the month she rarely had the hundreds of dollars she’d need to buy her own sofa.
Then in the fall of 2001, Motta discovered Rent-A-Center. Situated in mostly poor neighborhoods, this chain’s 2,600 stores offer big-ticket items like furniture and electronics to millions of people with no credit. Hiking up prices and charging exorbitant interest, using a scheme critics have called “pay now, pay later,” the company racks up sales in the billions and is a key player in what one market research firm calls “the poverty market.”
Here was the deal: For $600, Motta would buy a matching armchair and love seat, to be paid for over three months. Never mind that the contract she saw quoted the cash price as $1,350 and the price for paying by installment as $2,700. Those numbers wouldn’t apply to her, said the salesperson, since she was buying, not renting. She paid $300 on the spot and another $300 within 60 days.
But the story didn’t end there. Monthly bills continued to arrive, late fees stacked up, and “incomplete” payments were rejected. Rent-A-Center employees routinely called her at home, says Motta, and even came by in person to pressure her to pay. After two years, Motta had paid Rent-A-Center almost $2,000. “I was giving and giving and it was never done,” she recalled. “I told them to take their sofa.” The company would not comment on her case.
Today, still hoping for a refund, Motta has joined the growing ranks of dissatisfied Rent-A-Center consumers. The company, which owns the franchises Renters Choice, Remco, Get It Now, and ColorTyme, has been the target of several recent lawsuits accusing it of preying upon cash- and credit-strapped customers with sales practices that inflate and mask the true costs of their merchandise. An investigation by the New York City Department of Consumer Affairs in 2001 found that local Rent-A-Centers’ “cash prices” were as much as 225 percent above normal retail and that some of their long-term rental charges were equivalent to a 392 percent annual interest rate. The Cherry Street Rent-A-Center on New York’s Lower East Side, located in the shadow of a vast housing project, sells a plastic toddler bed shaped like a race car for $870 under a 90-day payment plan, and nearly $1,740 under a monthly plan. An online search found a comparable bed and mattress for as little as $325. A used Whirlpool refrigerator goes for $660 on the spot or $1,319 over 66 weeks. Sears’ website advertises a brand-new one for $570.
Darnley Stewart, an attorney who is leading a New York class-action suit against the company, finds this outrageous. “Rent-A-Center explicitly targets poor, largely minority neighborhoods and has no qualms about selling a cheap television for $700 to people who can’t afford it,” she says. Stewart’s suit, which is awaiting a ruling from the state Supreme Court, alleges that Rent-A-Center engaged in deceptive and fraudulent business practices by misrepresenting the actual costs of its merchandise and coercing customers with a “high-pressure sales scheme.”
But none of the numerous lawsuits against it–settlements in six states have totaled more than $256 million–has slowed the company’s growth. Last year, the firm, based in Plano, Texas, reported $2.3 billion in sales, with profits of $183 million. In part, the business is protected by an arcane distinction between rental businesses and ordinary retailers: By claiming that their customers are simply “renting” their goods, these companies–among which Rent-A-Center is the market leader–avoid usury laws that cap the interest rates on installment plans and require businesses to disclose what they’re charging. The rent-to-own sector has managed to neuter state and federal consumer-protection laws that would treat it as just another business selling goods on credit. Where it has failed to carve out loopholes in existing laws, the industry’s lobbyists have championed new legislation that distinguishes rent-to-own businesses from other retailers.
In the 1980s, they succeeded in getting legislatures to protect them in every state except Minnesota, New Jersey, Vermont, and Wisconsin. And the fight to shelter themselves in those four states continues. According to the Public Interest Research Group (PIRG), Rent-A-Center spent nearly $4 million between 1997 and 2002 trying to roll back consumer-protection laws in the states where it was still exposed.
In February 2003, Rep. Walter Jones (R-N.C.) introduced the Consumer Rental-Purchase Agreement Act, which consumer advocates say would further shield rent-to-own businesses from having to reveal or limit their monthly charges. According to Ed Mierzwinski, PIRG’s consumer program director, the bill would invalidate the already watered-down existing state laws regulating the businesses. “Since the rent-to-own boys cannot get the last pro-consumer states to roll over and play dead, they have been asking Congress to pass a weaker federal law to override them,” he said. The bill picked up 95 cosponsors before stalling in committee last fall, and has already resurfaced in the 109th Congress. Since last May, the lobby has had the help of former Republican House leader Dick Armey, who now sits on Rent-A-Center’s board.
Some customers use Rent-A-Center as just that, a rental center. “Sometimes they want stuff for a weekend,” says a salesperson at the Cherry Street store, gesturing to rows of stereos and DVD players. “We get people who want chairs for a party or a big TV to watch a fight.” But most customers would rather own products than rent them. According to a survey by the Federal Trade Commission, 70 percent of rent-to-own customers–a market of 45 million projected consumers that boasts $6 billion in sales– eventually end up buying merchandise.
In the face of steady complaints, Rent-A-Center argues that it is offering a service to an otherwise excluded demographic, and that its mission is simply to “improve the lives of our customers.” But others, like attorney Darnley Stewart, are not even mildly persuaded: “I don’t think you are doing the poor a favor by gouging them.”
Page 1 of 1 
How do you join a class action lawsuit? I am a victim of Rent a Center as well and would like to recover from the hundreds of dollars I have poured into this merchandise.
RIGHT NOW IM BEEING A VICTIM OF RENT A CENTER AND WE HAVE TO PUT A STOP TO THIS PEOPLE THAT ARE RIPPING US OFF WE WORK HARD FOR OUR MONEY....
Rent a Center does have higher prices, however you have to consider that the reason most of their customers are low income are because RAC is the only option to getting the things everyone wants. I know I can't afford 200.00 flat out for a tv if the tube goes in the one I have. I can however afford 30.00 a week. That is way RAC is there. As for the prices they are high for one simple reason, COLLECTIONS! RAC emploees spend 80% of their time chanceing people for the money or merchendise. just like all businesses if your overhead goes up so does your prices.
I was part of the outrage of customers that were victimized by RAC. I was sent notification of the money that was owed to me from the first lawsuit. I contacted them and my money was suppose to be sent; however, nothing further was ever done. I need to speak to someone regarding my money owed to me. I received another 800# and no ever returns my phone call. Please help; once again I am being victimized.
I'm one of the victims that Renter a Center ripped off I want to know how I join the law suit
The big thing I see missing from all of these complaints is the part where every customer of a rent-to-own store has looked at the prices you will pay for the merchandise in black and white on the rental agreement, and signed below! How do you think you have any leg to stand on? I know that this country has turned into a bunch of whinebags that want to sue when their feelings get hurt, but the "victim" is very loosely used in this case. Unless of course you are referring to being a victim of your own stupidity when you agreed to pay so much for merchandise in the first place. Furthermore, when you are behind on a bill, sometimes companies wish to discontinue their agreement with you. Which should be understood since the fact that you are behind in the first place means you have broken your end of the agreement anyway. Why do I not read about victims of the mortgage, water, electric, loan, and cable companies? If you don't pay them, each one will cut off your service or repossess their merchandise. What would you do if you sold a car, or any item for that matter, to someone that was going to make payments and they didn't pay you? If you would do nothing and would let them keep it....do you have a car for sale?
I would love to join this lawsuit against them. I got a laptop for my wife from Rent a crap. one payment to go and the monitor breaks. We dont know how or why (it was put away where nothing could hit it). YET they tell her that she owes them $1600 to fix it. Then when they gave it back to her UNFIXED, it looked like someone dropped it or threw it. it came back saying the monitor, keyboard and somehting else needed to be fixed. These places are nothing but scum bags praying on the people who cannot afford to go out and buy the stuff they need.
i,m having the same problem there always saying i,m late on a payment so i paid a week in advance and they said i was late again to tax on 18.00 late fee before that even happen they give me a torn sofa that took 3 months to replace with new
I've been paying on my furniture for 90 days never late my boyfriend got layed off and i fell behind on the bill rent a center will not give me a break till im able to get on my pay secheldule i've already payed over 1400 dollars can i get some help.
I have been a customer of Rent A Center for over 17 months and had purchased a sectional and end tables from Rent A Center, I have paid my bill Successfully they have even came to my house to pick their payment up. They have recently changed their name to Ge It Now and I was told I would recieve my almost $2000.00 credit and I only had about 4 months left on my payments and I should recieve a brand new set of furniture. They have manipulated me and now say that I have to pay for the newly used set that they brought out to me which is supposed to be mine anyway. I am being victimzed by Rent A Center Please Help
I have paid over $5,000 for a bedroom set which I should have paid $2,500 - the judge in NJ put a cap of 30% - I purchased my bedroom set from a rent-a-center in NY. is there a cap as well.
I would definately love to find out more information on this situattion because I have been renting item from them for 7 years. Some items it paid for untill the the contracted was up and some items I was harrased about when I was just one day late. There were some instances when they had new employees that did not know who the good paying customers were who would call the job and state to my employer, tell him rent-a-center called. When I would call back, they were very rude and did'nt care about what your current situation was at that time which made me return a lot of merchandise. Your payment could be due on a Saturday, they would call your house on friday and say, don't forget about tomorrow. I lost a lot of money dealing with them.
RAC is a ripp off. They over charge you for your merchandise. If you pay before 3 months they say it's one thing a day over the 3months they charge you triple. That is not fair, because why shoukd everybody have to suffer for someone else not paying there bills. They know these people can't afford to pay off this stuff in 3 months that's why they make it sound good and ripp these poor people off. They need to be ashamed of there selves. 30 a week. and if you're 1 day late they come to your house, call your job and harras people. I do not like RAC and will never rent from them ever again. I wish we could get our money back like those people in NJ did...
I would like to join this lawsuit as I've spent thousands of dollars with this company.
how do i find out about past law suits. i'm sure they owe me something from about 1997.
lady2tesh@hotmail.com
Im so glad i read all your comments before I made the mistake of going to RAC,I don't have bad or no credit,I just didn't want to put anything on my credit so my score wouldnt go down,so I was looking into RAC.This is why people should do thier research before commiting to anything financial.thanks for the info everyone.
I was planning on going to RAC but after reading this I've just decided to save $30 a week until I can afford to pay for my furniture up front! The only difference is I have to put up with my current furniture a little longer. It would've been nice to get something new right away but I doubt it would be worth the hassel if something went wrong. Life is full of unexpected happenings.
I was employed by RAC from 2000-2005. In my time at RAC I felt I was doing a service the people who came to rent merchandise. After I quit I realized over time how terrible a company RAC is. They prey on the low income level people. The executives of the company don't care (the district managers) about the customers. Numbers have to be met or they don't get their bonuses (very lucrative at that!). I am sorry to anyone I had made angry at RAC. It took leaving to see the error of my ways.
How do I find out about past lawsuits, I'm quite sure they owe me something. I have paid thousands of $ in the past to them. I will never make that mistake again. Word of advice, put that weekly payment in a coffee jar until you have saved enough to make your purchase.
i think your rent a center is cheating people out of there hard earn money.. and it`s not right.
This is all kind of funny. I work for RAC and have for 3 1/2 years and I have dedicated customers who pay their bills ontime, if someone runs into a problem we help the best we can, we don't get snotty with the customers, they pay our checks. People read and are read the agreements before they sign them along with (in my store) a paper that states again what they are signing and have the option to return. When you get behind it's hell to catch up, we have reinstatement. It's all about reading what you sign and respecting employees of a corporation who are just doing their job. Stop whining!
i want to know how to get more into this class action lawsuit. They call me all day everyday even after i make a payment, or set up a payment. They harass me and try to get threatning with me. right now they are charging 4,213 dollars for a 32 inch tv. the lady said it was only 1,200. thye come banging on my door all day everyday. i am about to take force against them
Not to coin a phrase, "But it is, what it is". You are renting, because you have the option of returning it at any time. You have the luxury of applying these payments toward the purchase at the end of the rental term. What you call targeting is more or less marketing. A business does not go where it can not make any money. One of the biggest problems in this world is people don't like to take responsiblity for their own actions. We like to blame someone else for what we do or can't do.
I have rented many different items and paid most of them off and even returned a few things because I could no longer afford them. Do you have that option with a credit card? My contracts are very easy to read and are very clear what you are paying and when. And lets face it, we used rent a center because we either have bad credit or can't get anymore credit. It's not their fault if a customer does not have the money to make the payment. They are trustin us with possibly an expensive item and If you can't pay for it, you take it back. If you don't take it back, they have the right to come and get the item. These things are all in the rental aggreement. It is easy to say you were a victim if you don't read what you sign. I'm not passing judgement, but Rent a center helped me get things I needed when I was unable to get the credit. I knew the prices were higher, but in reality we all would of probably just made the minimum payments and paid thousands in interest over time. Collection is never fun to be involved with. Do they have to be nasty; NO they don't, I agree with that, but as adults we need to make sure we can pay for or we don't get it. All this lawsuit is going to do is drive the prices up higher for the rest of us or make others unable to rent what they need.
Only we can stop living in the
Sue S of A and move back into the USA.
The phone number you are calling is not RAC, its an established number from the Law Firm. Try calling them and see what they say. They got most of the money from the lawsuit anyway.
Did you buy the protection plan? They have many. The problem you called them. Since you were renting they still owned the lap top and they have a projected amount of money to make from each item, so they were repairing things that were damaged during your use to make it rentable again. They also do not fix the items there they are sent back to the computer company. It was put away where it couldn't possible have gotten damaged??
READ THE CONTRACTS. Payments are due on certain day, by time the store closes. There is no grace period. If you miss the payment that day, you can avoid the late fee my paying the second payment early. I have never been charged a late fee.
I would like more info on this lawsuit. Im paying over 2,000 dollars for a used laptop that I didnt even get the right charger and the battery keeps falling out and the screen blinks every time you move it and all i get fromthe store manager is it was working just fine when i picked it up
'
O.K. They chase people for money. I get that. But, there is a right way to do it and a wrong way to do it. I am a Rent-a-Center person as well. I have told them not to call me unless my payment is past due. They call anyway. They call me at work, they call my supervisor at work. They discuss my accounts with third parties and they defame me. I helped my son get some furniture under my name. At the same time I got some things for myself. My account is 50% of the store's monthly income. You would think that they would want to be nice to me, but all they do is harass me. My son fell behind on his payments. I told him to return the furniture to the store. The store I work with hires illegals from Mexico, so I won't let them come to my home. My son gets wishy-washy about whether to give up the furniture or not and by the time he decides, the store refuses to take my payments for the items I got for myself even though the payment I offered was three days early and the items I was trying to pay on were under separate contracts. I don't answer their calls because I am sick of them calling me. I am sick of the threats of being sued. I am sick of the threats of being reported for theft, and I am sick of them talking to 3rd parties. Despite this, they don't seem to understand that I do know a bit about the law and that I have recorded every threatening phone call I've received. In fact I don't answer the phone because I know if they were stupid enough to threaten me once, they are stupid enough to do it again. These are federal crimes they are committing under the Federal Trade Commission and under the FCC. The problem is, most people only want to assert their rights in websites/forums like this. If you don't like being taken advantage of, use the law to protect yourself and complain, complain, complain. And, even though there is a mandatory arbitration clause, you are not required to settle anything. Bring the violations to the arbitration table so you have something to bargain with and push back on them as hard as they are pushing on you. By the way, who has ever been sued or actually had theft charges made on them by these people? Once you have the stuff, they HOPE you actually pay for it. If not, they write it off as a skip.
If only rent a center was straight foward about the actual price of the
item we and worked with customers as do your electric phone landlords etc do
you mr must be the perfect consumer living.
i am a victom also. i rented a 42"plasma. brand lg. i have already paid over 3,000.00 and i still have about the same to pay off the tv. i called lg and asked them how much the tv realy cost. they told me an esstimate of 1,999.92 it was put out in april of 2006. i got mine in may 23, 2006 and i still have 55 weeks left to pay it off. i would like to know how it is legal for them to charge just about 100% intrest fee. the economey realy stinks right now and you would think the company would understand. let me tell you they don't. i know i have been with them for about 14 years. every time we would pay something off we would get something new. i just cann't beleave how they treat there customers.
look it's simple it's on or before the due date, meaning on time, say you don't pay your light bill on the due date, they dont care they turn your utilities off. yes we are working americans but we have to do what we have to do.
mouse seems to have showed all just how snotty the employees of rac is.he says respect the employees well respect yourself and find a real job that your not a part of robbing people to pay yourself.further more wow what compation you have lets see when the shoes on the other foot u still feel so high and mighty.also if any company you owe speaks with anyone about your account other than you.its paid in full automatically.most people dont know that.hope rent center gets what they deserve and u hard working people get your money back thats owed.goodluck.
How do I join a class action lawsuit against these people. I find out that less that half my payment goes to the furniture the rest to rent-a-center. What is wrong with this picture. They tell me I have 9wks 4 days left on my payments which are $78 dollars biweekly, yet I owe only $173 to finish paying it off. What a rip-off! meemendo@yahoo.com
My daughter "purchased" a large television from Rent A Scam back in November of 2007. She was told the price was $1100 since it was a floor model. She was told the agreement would end in October 2008. In June of 2008,I was going to finish paying the tv outright to make them go away. One person told me the money owed was about $600. The next person said "oh no, that doesn't include x charges and the amount owed is still like $1,000. ???? I have paid since then about $800. during this time the tv has broken twice with the same problem. I told them they need to replace the tv with someone of equal value that isn't going to keep breaking and I want it even up. No more money. One person I spoke to said the remainder owed was still $349. the next guy, the manager (cough cough) said she still owes 22 weeks of payments. The weekly payments are about $35 each. That amounts to another $800. I think its time to file in small claims court over this issue. Not to mention the refrigerator she paid for, the door kept falling off until they finally gave her a different one. Rent a Piece of Crap is the worst business I've ever seen. The mafia charges less interest than these scumbags.
I have only one complaint about rent a center. It snowed so bad here in SE Portland earlier this month, the national guard was activated because police, fire and medical vehicles couldn't even move around. I still had to pay although the late fee for coming in a day after payment was due. My insurance I pay extra each month for wouldn't even cover it. Other than that, I have no problems with them. Yes they do charge a very high amount for their goods, but lets face it, they are providing goods to people who are commonly known as high risk. If I for some reason cannot afford to make my payments, I can just return the product until a later date, and the money I put down towards the buy out after the fees will be used towards the purchase of the next item I choose to take out. Heres a little hint to all of you who cannot keep track of you're finances, understand what you are getting yourself into before signing the contract, keep a copy of the contract, and keep receipts of ALL payments you have made. I do this with Rent a center, my apartment, and payments I make to my finance company for my car. If you don't follow this, then its only you're word against their database.
I agree with you, I have rented lots of things from RAC, the people I have delt with have been very nice to me, b/c they know I pay my bill on time and there has been one time when work was slow that I called in let them know what was happening and they helped work it out, sounds like people need to read what they are signing and if they dont understand ask! and I remember when I bought a bedroom suit and they brought me a pee stained mattress I returned it and told them that I wanted something differet and they brought me a diff mattress so its ur falt u payed for a furn u didnt want yes they are more expensive but learn what u are getting into before u sign
My husband & I are renting from rent a center. 3 months ago, he called to check how much he owed to pay off, and they said $500, and last weeks, he called again and they said $700!! And we'd been making our payments on time, and were well past the 90 day sames as cash period!
Consumers Beware
I am currently an employee of RAC. I wanted my opinion to be heard because all the other posts on here by other employees are only perpetuating the belief that it is solely the customer's fault for not reading the fine print and for not making sure they're not paying too much for an item. I hate this corporation from the inside out. I've seen little old ladies who live off of fixed monthly incomes becoming easy targets too many times to count. They're told the cash price (90 day term/lowest price) in order to entice the customer, but in the end you know that he/she isn't going to be able to pay that full $300 payment, so they'll pay the lesser amount. Which just stretches out the time and amount they pay. We're under such pressures to keep "the numbers right" (to keep no more than a certain percentage of people from being delinquent- late paying) that we become desentized to the plight of our customers. We have to call and call and call you again if you're late, and if that doesn't work we'll be at your door. Consumers Beware.
This has got to stop
I am also a victim of all the above and I thought I was the only one there is thousands if not millions of complaints on thi s company somebody help!!!!!!!!!!
Broke into home~!
They BROKE INTO my home and took my mattress when we were all at work trying to make money to pay for it!
