Rent to OwnNo credit check, low weekly payments and carry it home today? If you think the deals offered by rent-to-own stores are too good to be true, you are right. They are a ripoff according to a new investigation by Consumer Reports.

Consumers are paying the equivalent of up to 311% interest on items like big-screen televisions and other home appliances from rent-to-own stores, including Rent-A-Center (RCII) and Aaron's (AAN). As a result, rent-to-own merchants that advertise price-chopped deals with weekly or monthly payment plans end up charging consumers far more than buying those products outright at a traditional retailer.

The Consumer Reports investigation found deals where a $600 computer cost nearly $1,900 after less than year's worth of payments, and a washer-dryer combo with an original price tag of $1,000 cost $2,700 after two-and-a-half years with an interest rate of 100%.

It is not the first time Rent-A-Center has come under scrutiny. In 2009, Washington state's attorney general lodged complaints that the discount store harassed and threatened customers who were late on payments, and in 2007 the company settled a class-action lawsuit in New Jersey for $109 million for charging excessive interest.

In spite of dubious business practices by some companies in the industry, the $7 billion rent-to-own industry grew from 2.7 million customers in 2005 to 4.1 million in 2009, according to Association of Progressive Rental Organizations. With low sticker prices and tempting lay-away plans for big-ticket items, the stores appeal primarily to low-income families who are unable to afford appliances and electronics from traditional retailers.

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Opinions are like a$$h@le$, everybody has one.

January 25 2016 at 6:37 PM Report abuse rate up rate down Reply

I remember early this year, while lacking better judgement or just plain common sense, lease-to-own a Samsung Galaxy Tablet for a month or so from Rent-A-Center, going into a Rent-A-Center store and waiting at least an hour to be serviced. During that wait I witness one of the biggest rip offs I could ever fathom: a family going into an agreement to least out a Wii U game console (which had just come out in November of 2012) for about $1200 dollars. The game console looked like it was previously owned. The family seemed so naive about the amount they were paying for something that cost merely $400 out of a regular retail store. I looked at the sales person (as he was walking away from the family and went to get the paperwork) and asked him, "Are they actually going to have to pay $1200 in the long run for that?" He (the sales person) nodded his head at had the most devilish smirk on is face. I couldn't do anything but shake my head, I wanted so bad to tell them to just go to Walmart or Gamestop and purchase one for $400, but I didnt want to create a scene. I watched them in pity as this transaction went down. A few days later I decided I had no use for a tablet, I have a powerful laptop and a high end android phone that could do virtually everything this tablet could do. I called the manager of the store and informed him I was terminating my lease contract with them and would be bringing the item the next day, he did nothing short but beg me and offer me payment plans to keep me from breaking the lease. I laughed and explained that this just wasnt going to work out. The next day when I went to return the item he was thoroughly pissed at me, and non professional at all. But I sent out a clear message that I wasn't going to waste another one of my coins in a place that utilizes such unethical business practices to make a dime.

December 28 2013 at 1:23 PM Report abuse rate up rate down Reply

What is the interest rate on a red box movie? $1.00 per day right? So If I rent that movie for a year I would be paying $365. for a $15.00 movie. You might say well there is no interest because the $1.00 is a rental fee. Thats right. That's why RAC is named "Rent" a Center. The cool thing about the Rent to Own rental transaction is you have the option to buy it if you want. The last time I "Rented a car it was $79.00 a day pluss all of the extra's at Budget. If I rented this car for a month I would be paying $2,370. I could be leasing a Lotus for that! The rental transaction is all relative. I don't understand why the Rent to Own industry takes such a bad wrap when they actualy give you the bennifit of owning the goods instead of just turning in back in when you are done borrowing it.
I would suspect that everyone that has commented negativly on this blog has rented a Red Box, Car, tool, or event seating. Rent to Own is like Red Box or anything else that you rent but you get to keep it if you want. If you don't want it after you have taken it from new status to used you can give it back and go to Walmart. (if you have the cash). The Rent to Own Agreement isn't a contract for credit. You can give it back anytime if you don't like the arraingements just like redbox. I think of RAC like redbox. I can take it back when I am done. I can start over with brand new or a different one when I want it again. Rent to Own isn't a rip off. It is a great convienence. By the way why would you buy a gallon af milk for twice as much from a gas station? Everyone has done it.

Just trying to keep it all in perspective.

June 25 2011 at 5:22 PM Report abuse rate up rate down Reply

These companies need alot of regulation, which I know the Federal government is going to do. The interest charged needs to be capped at 21%. If an item has a retail value of $500, there shouldn't be more than 21% interest charged just like any department store credit card.

June 24 2011 at 9:59 PM Report abuse rate up rate down Reply

Furniture rentals are the biggest rip off!

June 24 2011 at 8:03 PM Report abuse +1 rate up rate down Reply

I am the owner of a five store rental chain. I have been in the renal business since 1985. Ten years in business for myself. My profit margins over the last three years have been under 4%. Our rental rates are the same as the national chains. Because this is a high risk industry with many charge off's and reurned damaged goods, our operating costs are very high. I would incourage those readers who say this is an unfavorable transaction to please do more accurate resarch. Hurts, Avis, Budget rental cars are all makeing much better margins that Rent a Center or Aarons.

June 24 2011 at 6:52 PM Report abuse -1 rate up rate down Reply

I have been in RTO most of my adult life. And it is just another business. The consumer has a choice to sign the contract or not. The are informed of all the rates, if the pay in cash the will most of the time better buys than in any other furniture or appliance store. They have the option of 90 to 120 days same as cash and the will get an early purchase option if the pay out after 90 or 120 days. And the RTO store take a huge risk of loosing the merchandise when the comsumer does not pay for it. And with the new laws and the laziness of the court system there is even more theft by 20 percent of the renters. If the consumer has a hard time paying most store will work with them and if they have to return the merchandise they can alway get it back with out losing any time or money on the item. I have gotten out of the RTO industry now, only because of the court system and it is becoming very dangerous out in the field trying to collect on the dead beats. And most people that think that RTO is a rip out are usually the dead beats that did not pay for the merchandise in the first place and the company was forced to retrieve the merchandise. But the people in america have a choice to sign or not to sign the contract. But just like the housing and the bail outs people just want something for nothing and when they are held accountable people will blame the company and not themselves.. Buy what you can afford to don't buy it at all.

June 24 2011 at 6:42 PM Report abuse rate up rate down Reply
scott hogan

I'm a owner of 2 stores. Most of you people have no idea what we do. My profit margins are not as good as Walmart. We provide a valuable service to customers with bad credit or no credit. We offer 120 days same as cash and are very competitive with furniture retailers. We also offer 50% discounts if a customer decides to pay off there account after the 120 days. We provide brand new, brand name products. We provide customer service second to done.

June 24 2011 at 5:46 PM Report abuse +1 rate up rate down Reply
1 reply to scott hogan's comment

Mr. Hogan, I am mmrk1025. I am out of the business but as you read through these posts, the passion for helping the customer remains, I am a franchise builder, Worked a s Regional. District. and GM.

June 24 2011 at 7:49 PM Report abuse rate up rate down Reply
1 reply to mmrk1025's comment

You may contact me at that aol address.

June 24 2011 at 7:53 PM Report abuse rate up rate down


June 24 2011 at 3:11 PM Report abuse +1 rate up rate down Reply

Where would our welfare dollars go if it weren't for these rent-to-own companies? I used to be in this business and actually heard this response to our salesmans question about whether the customer could afford the 100 watt stereo vs a cheaper 50 watt model......"it no problem man, I will just have another baby and my SSI payment will go up".

June 24 2011 at 3:09 PM Report abuse -1 rate up rate down Reply