Is Rent-to-Own a ripoff?

If you are renting from Rent-A-Center or Aaron’s you could be paying up to 311% interest on your big screen TV’s or your new washer and dryer. While advertising cheap weekly payments and discounts, consumers are paying far more than if they went out and bought the products.

Consumers Reports found out that deals where you rented a $600 computer, you could pay almost $1,900 after less than a years worth of payments. Also a washer and dryer with an original price tag of $1,000 could cost you almost $2,700 after two years with interest of 100%.

This has happened before in Washington State when the attorney general filed a complaint that the store harassed customers who were late on payments. In new Jersey, in 2007, the company settled a class action law suit for $109 million dollars for charging excessive interest.

The rent-to-own business is a $7 billion dollar a year business and it has grown from 2.7 million customers in 2005 to 4.1 million customers in 2009 according to the Association of Progressive Rental Organizations.

These rent-to-own stores appeal to the low-income families that have a hard time acquiring credit at regular stores. These stores promise new appliances and electronics for low weekly payments that sound good at the moment. But if you added all the charges and totaled all the payments, you would see your paying double or triple the price of a regular store.

Rent-A-Center customers were interviewed and indicated that they knew that the payments were excessive but had no choice because the items they rent were a necessity. Also the customers told of how there was no other way for them to pay for the items. Rent-A-Center made it afforable to them.