OAKLAND, Calif. (BCN) — Tens of thousands of California consumers are eligible for restitution following a settlement announced Tuesday in Oakland between the California Department of Justice and Rent-A-Center, a rent-to-own furniture and electronics store, prosecutors said.
State Attorney General Rob Bonta announced the $15.5 million settlement outside the Rene C. Davidson Courthouse Tuesday morning. More than $13 million will go to consumers who entered into certain lease agreements with Rent-A-Center.
The state investigation centered on Rent-A-Center’s kiosk business, which operates in retail stores like Ashley Furniture, the complaint says. Prosecutors allege that the “cash price” Rent-A-Center charged Rent-A-Center customers was 15 percent higher than the retail price a retailer like Ashley Furniture charged, in violation of the Karnette Rental-Purchase Act, California’s rent-to-own law.
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That bumped up a consumer’s costs by hundreds of dollars possibly, prosecutors said. “Rent-A-Center repeatedly relied on deceptive tactics to pad its pockets,” Bonta said at a news conference announcing the settlement. “The company broke the law.”
Rent-A-Center also allegedly misled buyers about the basic aspects of the lease, such as their right to return products without a penalty. The lease agreements, called Preferred Lease agreements, were formerly known as AcceptanceNOW, according to the Department of Justice.
Bonta said the settlement will prevent Rent-A-Center from continuing its unlawful conduct. As part of the agreement with the California Department of Justice, Rent-A-Center must train its employees about the terms of the settlement and the Karnette Act.
Rent-A-Center must charge the same price to Preferred Lease customers as retailers charge their customers. Rent-A-Center must allow returns without preventing or limiting them in any way.
The company must make clear to customers that its Preferred Lease agreement is a rent-to-own transaction and give each customer a document telling them the key terms of the agreement. Rent-A-Center must submit annual reports to Bonta’s office on the company’s work to comply with the settlement.
Rent-A-Center must pay $2 million in civil penalties. Rent-A-Center customers who are eligible for restitution will get a notice in the mail at their last known address.
A spokesperson for Rent-A-Center did not respond as of Tuesday afternoon to a request for comment on the settlement.
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