Rent-A-Center
Five times the price
Rent-A-Center, a publicly traded company, has two basic business models. It has more than 2,400 stores, largely near low-income neighborhoods and military bases, where customers can rent items directly.
It also operates as Acceptance Now inside nearly 1,300 independently owned furniture stores, including Ashley Furniture and Rooms-to-go. In those showrooms, customers pick out furniture but instead of buying it themselves, Acceptance Now purchases it and leases it to them, removing the store from responsibility in disputes.
The rent-to-own industry has been controversial for decades, largely because it is pricey. A NerdWallet analysis of Rent-A-Center prices to rent or buy in 48 states and the District of Columbia showed the costs.
A Vizio soundbar with subwoofer retails for $148 at Amazon. It would cost more than five times as much, $779, if you lease-purchased in a one-year contract from Rent-A-Center. At a weekly rental rate of $14.99, a customer could save the money for just 10 weeks and buy the item elsewhere.
Rent-A-Center said its prices are higher because they include delivery, setup and services other retailers don't offer. The company says its prices also reflect the risk of doing business with a population many retailers do not accommodate.
Strict collection targets and tactics
Rent-A-Center has strict collection targets. Former managers told reporters that a store's percentage of past due customers must be under 6 percent each week. If stores don't hit their numbers, managers can lose their jobs.
The Federal Trade Commission received 2,779 complaints about Rent-A-Center and Acceptance Now between January 2016 and June 2017. More than 90 percent cited aggressive collection tactics.
Ohio customer Gorman says Rent-A-Center workers kicked in her door after she fell two months behind on a contract for a laptop, which she had nearly paid off. She had lost her job and says she told Rent-A-Center she needed several more weeks to make final payments.
Instead workers broke into her home while she was away, Gorman told Lima police citing a neighbor who witnessed the incident.
Washington state sued Rent-A-Center in 2009, accusing the company of abusive collection practices.
Rent-A-Center settled the lawsuit in 2010, say it had done nothing wrong but agreeing to not use abusive language, trespass or visit customers' workplaces after being told not to do so.
Since that settlement, the Washington attorney general has received more than 800 pages of complaints about Rent-A-Center.
Chris Korst, Rent-A-Center's chief administrative officer, said in an email that the company takes complaints seriously "We strive to provide the highest level of customer service and when we fall short of that expectation, we work equally hard to resolve those issues."
Olivia Quinn stood next to a dresser she brought as part of a bedroom set from Acceptance Now in Newport News, Va. Quinn said a series of mistakes by the company led to a ding on her credit report, which cost her years of hassle and a mortgage.
Modern-day debtors prison
Laws in many states allow rent-to-own companies to pursue criminal charges against customers who miss payments and don't return rentals upon request.
David Strosnider, a former Rent-A-Center manager in North Carolina, says some Rent-A-Center managers filed charges on anybody who didn't pay.
Rent-A-Center's Corporate office gave stores "free rein" with delinquent customers, says Strosnider, who worked for the company from 2012 to 2015. "Their message was "Do whatever you have to do to get your money."
In Houston, the Harris County district attorney has filed criminal theft charges against ret-to-own customers for at least two decades, says Valarie Turner county chief of consumer fraud.
Murray Newman who worked as a Harris County prosecutor from 1999 to 2008, says he justified theft charges if a customer rented an item, never made a payment and refused to give it back.
But he said Rent-A-Center didn't make that distinction. Many customers who fell behind on payments had no intent to steal, he says.
Rent-A-Center said in an email it uses criminal charges in "extremely limited circumstances" and only when the intent to commit theft is apparent.
Lasting damage to customers
Rent-A-Center shareholders filed a federal lawsuit against the company in December of 2016 over problems with its system for tracking customer payments. The complaint said Rent-A-Center had difficulty starting a new point of sale system in 2015, causing "Severe harm" to operations.
Rent-A-Center tried to get the case dismissed but a judge denied its requests.
Walton the Rent-A-Center customer from Georgia, says he has been called by at-least five debt collectors about bills he paid in full.
His bank records show he paid off the $2,035.93 he owed for a dining room set and sectional sofa from Acceptance Now but could not get the error corrected.
In February, four years later after he settled his debt, a collection agency left voicemails warning that he would be arrested if he didn't pay he says.
Even debt collectors are angry
In late 2014, Rent-A-Center sold collection agencies more than 18,000 accounts it deemed seriously in arrears.
Brandon Vigliotti, a Houston debt buyer and president of Lismore Holdings, purchased the accounts and gave about half to a second company to help collect on the debt. Vigliotti says at least 1 in 5 customers owed nothing. The numbers were worse for a second company, Southwesters Investors Group, and one of its collection agencies, Element global Services.
At least one-third of the 8,200 customers Eleent contacted had no balance on their accounts, says Eric Westermeyer, its former chief operating officer.
Southwestern and Element filed a lawsuit against Rent-A-Center and Lismore in October 2015.
Rent-A-Center would not comment on the allegations. The case is in arbitration. But the company told reporters "there is a substantial risk that you may have been misinformed as to the facts."
Adam Parks, who worked with Vigliotti, said Rent-A-Center's Acceptance Now outlets continued to accept customers' money even after their accounts were sold.
"They were continuing to collect on accounts that weren't theirs and not crediting consumers," says Parks, who is on the board of the Receivables Management Association, an industry trade group for debt collectors. "To me, it's fraud."
Paid twice but credit wrecked
Olivia Quinn is the Virginia woman who says she lost her mortgage over a $990 bedroom set.
She got the items at a Kane's Furniture in Florida in 2011. She thought Kane's handled the transaction and says she wasn't told Acceptance Now had taken it over.
In 2012, after her records show payments totaling nearly $1,500, she called Kane's to pay off the account. A Kane's manager said he would credit her payment, she says.
Three years later, a collection agency called Quinn to say she owed more than $1,600 to Acceptance Now, she says.
She didn't associate the debt with her Kane's furniture. But because she was shopping for a house and needed good credit, she paid the $799 collectors sought to settle the account, she says.
The collector sent her a payoff letter. Months later, as she was applying for a mortgage, her credit report showed an outstanding Rent-A-Center balance of $1,698. After investigating, she learned that her Kane's furniture had been paid for through Rent-A-Center.
With her mortgage hanging in the balance, Quinn spoke to nearly 20 people trying to resolve the problem, according to notes she kept.
A Kane's spokeswoman told reporters the company has no record of the transaction. Quinn say Rent-A-Center employees refused to accept the payoff letter, asking her to pay them directly.
Armed with records showing she paid more than $3,000 for the furniture, more than triple the cash price, she refused.
That's when she says her mortgage fell through. The $1,698 debt is still on her credit report.
Rent-A-Center, a publicly traded company, has two basic business models. It has more than 2,400 stores, largely near low-income neighborhoods and military bases, where customers can rent items directly.
It also operates as Acceptance Now inside nearly 1,300 independently owned furniture stores, including Ashley Furniture and Rooms-to-go. In those showrooms, customers pick out furniture but instead of buying it themselves, Acceptance Now purchases it and leases it to them, removing the store from responsibility in disputes.
The rent-to-own industry has been controversial for decades, largely because it is pricey. A NerdWallet analysis of Rent-A-Center prices to rent or buy in 48 states and the District of Columbia showed the costs.
A Vizio soundbar with subwoofer retails for $148 at Amazon. It would cost more than five times as much, $779, if you lease-purchased in a one-year contract from Rent-A-Center. At a weekly rental rate of $14.99, a customer could save the money for just 10 weeks and buy the item elsewhere.
Rent-A-Center said its prices are higher because they include delivery, setup and services other retailers don't offer. The company says its prices also reflect the risk of doing business with a population many retailers do not accommodate.
Strict collection targets and tactics
Rent-A-Center has strict collection targets. Former managers told reporters that a store's percentage of past due customers must be under 6 percent each week. If stores don't hit their numbers, managers can lose their jobs.
The Federal Trade Commission received 2,779 complaints about Rent-A-Center and Acceptance Now between January 2016 and June 2017. More than 90 percent cited aggressive collection tactics.
Ohio customer Gorman says Rent-A-Center workers kicked in her door after she fell two months behind on a contract for a laptop, which she had nearly paid off. She had lost her job and says she told Rent-A-Center she needed several more weeks to make final payments.
Instead workers broke into her home while she was away, Gorman told Lima police citing a neighbor who witnessed the incident.
Washington state sued Rent-A-Center in 2009, accusing the company of abusive collection practices.
Rent-A-Center settled the lawsuit in 2010, say it had done nothing wrong but agreeing to not use abusive language, trespass or visit customers' workplaces after being told not to do so.
Since that settlement, the Washington attorney general has received more than 800 pages of complaints about Rent-A-Center.
Chris Korst, Rent-A-Center's chief administrative officer, said in an email that the company takes complaints seriously "We strive to provide the highest level of customer service and when we fall short of that expectation, we work equally hard to resolve those issues."
Olivia Quinn stood next to a dresser she brought as part of a bedroom set from Acceptance Now in Newport News, Va. Quinn said a series of mistakes by the company led to a ding on her credit report, which cost her years of hassle and a mortgage.
Modern-day debtors prison
Laws in many states allow rent-to-own companies to pursue criminal charges against customers who miss payments and don't return rentals upon request.
David Strosnider, a former Rent-A-Center manager in North Carolina, says some Rent-A-Center managers filed charges on anybody who didn't pay.
Rent-A-Center's Corporate office gave stores "free rein" with delinquent customers, says Strosnider, who worked for the company from 2012 to 2015. "Their message was "Do whatever you have to do to get your money."
In Houston, the Harris County district attorney has filed criminal theft charges against ret-to-own customers for at least two decades, says Valarie Turner county chief of consumer fraud.
Murray Newman who worked as a Harris County prosecutor from 1999 to 2008, says he justified theft charges if a customer rented an item, never made a payment and refused to give it back.
But he said Rent-A-Center didn't make that distinction. Many customers who fell behind on payments had no intent to steal, he says.
Rent-A-Center said in an email it uses criminal charges in "extremely limited circumstances" and only when the intent to commit theft is apparent.
Lasting damage to customers
Rent-A-Center shareholders filed a federal lawsuit against the company in December of 2016 over problems with its system for tracking customer payments. The complaint said Rent-A-Center had difficulty starting a new point of sale system in 2015, causing "Severe harm" to operations.
Rent-A-Center tried to get the case dismissed but a judge denied its requests.
Walton the Rent-A-Center customer from Georgia, says he has been called by at-least five debt collectors about bills he paid in full.
His bank records show he paid off the $2,035.93 he owed for a dining room set and sectional sofa from Acceptance Now but could not get the error corrected.
In February, four years later after he settled his debt, a collection agency left voicemails warning that he would be arrested if he didn't pay he says.
Even debt collectors are angry
In late 2014, Rent-A-Center sold collection agencies more than 18,000 accounts it deemed seriously in arrears.
Brandon Vigliotti, a Houston debt buyer and president of Lismore Holdings, purchased the accounts and gave about half to a second company to help collect on the debt. Vigliotti says at least 1 in 5 customers owed nothing. The numbers were worse for a second company, Southwesters Investors Group, and one of its collection agencies, Element global Services.
At least one-third of the 8,200 customers Eleent contacted had no balance on their accounts, says Eric Westermeyer, its former chief operating officer.
Southwestern and Element filed a lawsuit against Rent-A-Center and Lismore in October 2015.
Rent-A-Center would not comment on the allegations. The case is in arbitration. But the company told reporters "there is a substantial risk that you may have been misinformed as to the facts."
Adam Parks, who worked with Vigliotti, said Rent-A-Center's Acceptance Now outlets continued to accept customers' money even after their accounts were sold.
"They were continuing to collect on accounts that weren't theirs and not crediting consumers," says Parks, who is on the board of the Receivables Management Association, an industry trade group for debt collectors. "To me, it's fraud."
Paid twice but credit wrecked
Olivia Quinn is the Virginia woman who says she lost her mortgage over a $990 bedroom set.
She got the items at a Kane's Furniture in Florida in 2011. She thought Kane's handled the transaction and says she wasn't told Acceptance Now had taken it over.
In 2012, after her records show payments totaling nearly $1,500, she called Kane's to pay off the account. A Kane's manager said he would credit her payment, she says.
Three years later, a collection agency called Quinn to say she owed more than $1,600 to Acceptance Now, she says.
She didn't associate the debt with her Kane's furniture. But because she was shopping for a house and needed good credit, she paid the $799 collectors sought to settle the account, she says.
The collector sent her a payoff letter. Months later, as she was applying for a mortgage, her credit report showed an outstanding Rent-A-Center balance of $1,698. After investigating, she learned that her Kane's furniture had been paid for through Rent-A-Center.
With her mortgage hanging in the balance, Quinn spoke to nearly 20 people trying to resolve the problem, according to notes she kept.
A Kane's spokeswoman told reporters the company has no record of the transaction. Quinn say Rent-A-Center employees refused to accept the payoff letter, asking her to pay them directly.
Armed with records showing she paid more than $3,000 for the furniture, more than triple the cash price, she refused.
That's when she says her mortgage fell through. The $1,698 debt is still on her credit report.
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