Issues Raised by Rent to Own
Rent to own transactions raise the issue of how much the government should protect people from their own poor choices. Consumer advocates believe that if people knew how much they were really paying for rent-to-own merchandise then they would not choose to make the purchase. They point to the people who are making rent-to-own purchases and note that these transactions are engaged in by a disproportionate amount of poor and undereducated people. The rent-to-own industry counters with facts suggesting that the consumers are generally pleased with their experiences and that they are filling a need for people who do not have access to credit or cash, yet still have needs and wants.
Rent to Own Regulations
Regulations that require disclosure and information seem appropriate. Hiding mandatory fees or otherwise preventing customers from understanding the meaning of the transaction should not be permitted by the states or the federal government. However, people should have the right to allocate their own money however they choose. Many of the same consumer advocates who decry the rent-to-own practices make purchases that others would consider to be frivolous wastes of money. If a rent-to-own consumer chooses to use their disposable income to pay extra so that they can use the product immediately instead of putting it on layaway, then the consumer should have that choice provided that there is a seller willing to join them in the transaction.
Advocating information, we believe that the following should be disclosed before the sale or contract:
- Payment amount
- Payment frequency
- Mandatory charges
- Effect of a late payment
- Retail price of the product
- Whether the item is new or used
- Total price paid at the end of the term
Rent to Own Regulatory Conclusions