More Protections for Rent-to-Own Users
Vermont's S 73 bill provides consumer protections for our most vulnerable constituents
Janie* is a single mom who knows first-hand how expensive Rent-to-Own stores can be when you’re living on a fixed income. Several years ago she signed a contract for a laptop but because the payments were so expensive, she couldn’t keep up with the bills and had to return the computer a few months later. “They (Rent –to-own stores) are way too expensive “, she cautions, “I’m never dealing with them again.” On the flip side are Andrea and her husband Mike. She reports that they own furniture and appliances from a local Rent-to-Own store and although it was overprice, “it was good—it worked for us and we paid our stuff off early so it wasn’t so expensive in the end.” Yet another experienced Rent-to-Own user, Tamara, says she misses her washer and dryer that she left behind at another apartment because it was too much of a hassle to take them with her when she had to move. Now the single mom and full-time college student has to shuttle her laundry around in her car and spends $80 a month doing laundry for her and her 2 kids. She, too, is thankful that she had the opportunity to rent-to-own when her credit wasn’t great and her income not enough to purchase the set.
It’s easy for those of us who have extra income and good credit to complain about the Rent-to-Own industry. After all, we know it’s expensive and overpriced and folks often don’t end up owning their purchase in the end because they can’t keep up with the payments. Our first thoughts might be, “just save the money and buy it outright” or “go to a yard sale and get it.” But, for many low income Vermonters, Rent-to-own is the only option that allows them to have new (or newish) appliances or furniture and modern computers and televisions that they wouldn’t otherwise be able to purchase with store credit or to buy outright. Rent-to-Own stores have a place in Vermont and they will continue to serve a need in our communities.
That’s why here at Capstone Community Action we were thrilled when Governor Shumlin stopped by our offices a few weeks ago to sign S 73, a consumer protection bill that specifically addresses the rent-to-own businesses. This bill provides more transparency to buyers by requiring rent-to-own agreements to make known in clear and concise language the due dates, charges and fees, responsibility for service and repair, warranty, and other provisions. It also limits the amount that a rent- to-own store can charge for an item over the life of the contract—no more than 2 times the “cash price” of the item. This is welcome news for some folks who have ended up paying nearly 4 times the price of the original item due to interest and other charges. And, in traditional Vermont style, our state is the first in the nation to require a mandatory discount of at least 10% on all used items that are leased in rent- to-own businesses. The bill also puts controls on the collection practices so that people aren’t receiving repeated harassing or unwanted calls. Because the previous law said little about the rent to own practices and there were no specific rules in place to enforce the industry, this bill is a victory for Vermont consumers.
Rent –to-own stores are a part of our community and they serve a need for many of our vulnerable neighbors. We are proud that our legislators and low-income advocates worked tirelessly to make this bill a reality so that more Vermonters are getting a fair and reasonable deal when they rent to own.
*names have been changed