LC-12 · Consumer
Rent-to-own markups
A washer at three times the price
In ordinary words
Rent-to-own stores lease a television or appliance week to week. If the customer completes every payment, the total often runs two or three times a cash retail price. Default, and the item comes back, with payments kept.
Why people call it a crime
It looks like a credit sale with a hidden interest rate that would violate usury laws. The contract is written as a lease, and in most states that label holds.
A scene, not a hypothetical statute
The same washer is $600 at the big-box store and $1,800 if every rent-to-own week is paid. Miss a week and the washer leaves. The store followed the rental-purchase statute.
In legal terms
Most states regulate rent-to-own under specific rental-purchase statutes that require disclosures but do not cap the total at a bank-loan APR. Courts often refuse to recharacterize the deals as credit sales when the customer can return the goods and walk away. The federal Consumer Leasing Act can apply to longer leases but was not designed as a usury cap.
Lawmakers accepted the industry’s frame: a cancellable week-to-week rental is not a loan, because the customer does not owe the remaining balance after returning the goods.
State rental-purchase acts; 15 U.S.C. §§ 1667–1667f (Consumer Leasing Act).
Where it stops being legal
Calling it a sale while hiding a security interest, repossessing with breach of the peace, or violating a state cap where one exists crosses the line. False advertising of a “cash price” can be a deceptive-practice claim.