Rent-A -Center

Oh Bella. I wouldn't do it. I just read a big article (maybe even on here) about Rent-A-Center.

Not a good deal.

Let me see if I can find the article

Here it is - bobsmyhawk posted it a while back:

Pay Now, Pay Later

News: Rent-A-Center has a model for getting poor people to blow hundreds on installment purchases. Step one: Charge 400 percent interest.

By Anya Schiffrin
Additional reporting by Maria Ma and Veronika Ruff

from Mother Jones
May/June 2005 Issue





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."

Anya Schiffrin is co-director of the International Media and Communications (IMC) program and an adjunct professor at Columbia University where she teaches Topics in International Business and Economic Reporting. Schiffrin is the director of journalism training programs at the Initiative for Policy Dialogue, an international network of economists based at Columbia, and founder of journalismtraining.net. She is co-editor, with Amer Bisat, of the 2004 book, Covering Globalization.

That's all I needed to know. Thanks Boomer!!

I guess we will just wait until we can pay cash.

Save some $$, and go used! Pick up a Want Ad, or find stuff on craigslist.

bingo!
About the time that school lets out, many people at universities are looking to rid themselves of furniture.
If you can save about 15% of the cost of what ever piece of furniture you are looking for, almost all companies will finance a payment plan for you.
Bassett funiture is what the mr and i did.
we got 5,000 worth of living room furniture financed and all I came to thier store with was 1000. WAY less then 15% but a good amount anyways.

Do some calling . Call places like Sears and ask how much money they would require down on a certain amount of money for furniture before they would finance you.
Ask your bank for a loan.
Co sign together on a card simply for the use of furniture. Your combined credit may be much mroe helpful then one of you by yourself.

Craigslist?

www.craiglist.org

Once there, click on "Detroit" (or whatever is closest to you.)

I think I first heard about it from Slappy, I now recommend it willy-nilly. It's how I've been making money the last few months (freelance writing and editing), but it has a stuff section too (i.e. furniture.)

Check out Ikea online too, even with shipping costs it's cheaper than most.

I love you guys.

Sorry, misspelled. craigSlist

www.craigslist.org

Example:

http://www.craigslist.org/sfc/fur/85278716.html

The only time when it's okay to go through someplace like that is for a really temporary situation.

When in college, I had a roommate who knew she was only going to be around 4 months, cost her next to nothing.

If you are "staging" your house for sale would be another instance.

It's really pretty crappy furniture

You're right, wait until you have some cash. For in the meantime, find something at a yard sale.

Wait...you've been making money from craigslist, and you heard about it through me? Where's my cut, woman?

I wouldn't use a store credit card to finance furniture, or pretty much any retail store credit card. The rates are ridiculous, higher than normal credit cards.

Ooh!

http://www.craigslist.org/eby/fur/85275394.html

OK, I'll stop.

Now I gotta check out what's available in Columbus, though...

Your cut?

Um.

I never ate that chocolate cookie, how 'bout if I send it back? It's kinda hard <tap tap> but should still be edible...

You people think I should spread my genius for free.

My daughter wanted to get a TV for her apartment off campus. So she called and asked whether she could use the credit cards to "Rent-to-own" a set. I called the place to aske what it would take to buy the set after a couple weeks (she was seeing whether she liked it) When the guy quoted the price I said something like
"Youve gotta be shittin me, I can get that same saet at BJs for almost 14th the price'"
The exhorbitant rates they charge is almost like loan sharking.
My daughter is in an economics program for pre law. Iasked her how is it , after 3 years of college she has apparently not learned anything. She said that she wasnt fully aware of the "vig" and the steep shylock rates, when she did get it strait (and let the contract lapse and bought a TV at a BJs) she wrote a paper for her "social justice classes" and got an A for disclosing this entire wrinkle in the economy. Sometimes , a little bad **** can turn into some good ****.

That's not what we want you to spread.

Keep your perversions to yourself, Bella...I'm not that kind of guy.

So, uh...where do ye' want it? My genius, that is.

On my leg.