Pennsylvania to receive more than $1.6 million in restitution and $3.6 million in lease forgiveness for consumers
HARRISBURG – Attorney General Dave Sunday announced a $183.5 million multistate settlement with Acima Digital, LLC and its direct parent company, Acima Holdings, LLC., regarding deception and inflation of costs and fees for consumers financing rent-to-own items.
The settlement consists of $43 million in consumer restitution, $10.5 million to the states, and lease balance reductions totaling $130 million. Impacted Pennsylvania consumers are expected to receive more than $5 million in restitution and lease forgiveness relief.
Acima is a rent-to-own finance company that partners with retailers to offer financing to consumers through rental-purchase agreements. The settlement resolves allegations that Acima deceptively advertised its rental-purchase agreements in a manner that misled consumers about the nature and cost of its rental-purchase agreements, and deceptively marked up the cash price of the merchandise being rented.
“Many consumers on a budget may turn to rent-to-own companies for larger expenses such as furniture or electronics, but in many cases, we found Acima caused more financial strain and stress for lessees,” Attorney General Sunday said. “This settlement allows almost 9,000 Pennsylvanian consumers to have their leases paid off, forgiven, or have money returned to them.”
Impacted consumers do not need to take any action to be considered for restitution or lease forgiveness but more information will be sent to those impacted.
The multistate coalition of 43 states – led by Pennsylvania, Colorado, and Tennessee – alleges that Acima marketed its rental-purchase agreements as 90-day pay off programs without disclosing that consumers were automatically placed into the maximum 12-month term where consumers could pay approximately two times the cash price advertised by Acima’s retail partner.
Acima also allegedly advertised its rental-purchase products using terms like “credit,” which often misled consumers into believing that they were obtaining traditional financing. Acima’s process for electronically implementing rental-purchase agreements allegedly obscured the terms of the transaction, further adding to consumer confusion. Additionally, Acima allegedly hindered consumers’ ability to terminate their rental-purchase agreements without penalty by returning their merchandise to Acima.
Consumers who are eligible to obtain restitution or lease forgiveness as part of this settlement do not need to take any action. Consumers eligible to receive restitution will be contacted by the settlement administrator. Consumers who are eligible to receive lease forgiveness will be contacted by Acima.
Under the settlement, Acima has agreed to injunctive terms to address these practices, including to:
- Conduct robust training of its retail partners;
- Refrain from making certain representations in its advertising unless other material information is clearly and conspicuously disclosed;
- Refrain from obscuring the material terms and conditions of its rental-purchase agreements during Acima’s electronic signature process;
- Refrain from marking up the cash price from that of Acima’s retail partners;
- Refrain from obstructing consumers’ ability to terminate their rental-purchase agreements by returning the merchandise to Acima;
- Refrain from reporting rental-purchase agreements to the big three credit reporting agencies for a period of 5 years; and
- Properly handle late deliveries, merchandise damaged at the time of delivery, and repairs to merchandise during the course of the lease, if state law or the rental-purchase agreement requires Acima to maintain the merchandise during the course of the lease.
The state attorneys general that joined Attorney General Sunday in today’s settlement are Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Minnesota, Nebraska, New Hampshire, New Jersey, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The Consent Petition was filed in the Allegheny County Court of Common Pleas by Assistant Chief Deputy Attorney General Jill T. Ambrose and is pending approval by the Court.
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