Some customers claim, after buying furniture at well-known big retail chains, they discovered they didn't buy it at all.
Jim Pugh found a sectional at a big furniture chain where he was offered a different payment plan.
"It's this new program we have to help people hit by the bad economy," said Pugh.
It was called RAC Acceptance.
"Let us get you a credit line through RAC, and she did," said Pugh.
The sectional cost $1,400. His payments totaled $170 a month. But after paying for a year, Pugh still owed nearly $2,000.
Pugh said that's when he found out RAC was part of Rent-a-Center and he was actually renting his sectional.
"They never said nothing about renting. When I came to the store I wanted to buy," said Pugh.
Rent a Center has small offices in many major furniture and electronic stores, including Kanes, Rooms To Go, Ashley, and HH Gregg, where RAC employees offer rent-to-own options.
But Action 9 checked, RAC signs don't include the word
rental. It's only in the application's fine print.
Robin Shaffroth thought she purchased furniture from another big chain when she signed a RAC contract.
"I had no idea it was a rental company. They never introduced themselves as such," said Shaffroth.
Consumer groups claim full disclosure is a big deal since the equivalent interest rate to rent furniture can be 200 percent a year.
"There's a lack of transparency if the consumer believes they're going to purchase furniture and they come out with a rental agreement," said Better Business Bureau President Judy Pepper.
Rent-a-Center said its program helps folks who can't get credit, and the rental purchase agreement clearly spells out customers don't own property and it's a rental transaction.
Rent-a-Center told Action 9, because of our story, it will change the application it uses nationwide so it's clearly labeled a lease order form.
The company said the program already complied with all Florida laws, but it wanted to address any concerns.
Responses to this Action 9 Story
Dear Mr. Ulrich:
Thank you for reaching out to me. I appreciate your interest in promoting a better understanding of our products and services.
It is worth noting that the RAC Acceptance agreement in question prominently bears the words “RENTAL-PURCHASE AGREEMENT” across the top in bold, capital letters and repeatedly refers to a lessor and a lessee, making abundantly clear that this is a lease and not a credit transaction. Additionally, it is fully compliant with the Florida’s requirements governing rental-purchase agreements.
As you correctly pointed out, the customer order form does not include the word “lease.” It does, however, indicate “this form is an application to rent…” in a bolded section labeled “SIGN AFTER READING STATEMENT.”
Though it too is fully compliant with Florida law, we are interested in preventing any future dissatisfaction concerning our rental-purchase agreements. Your suggestion that we change the name of the customer order form to lease order form is a reasonable one, and we’ve decided to adopt it. In the interest of heightened clarity, “Lease Order Form” will be printed across the top of this document as soon as we can roll out the revised forms.
Kane's Furniture Response:
In essence, we have used the RAC program for about two years. We are only aware of one issue where the customer told us that they felt the program was misrepresented by a RAC employee and that was in our Melbourne location. We did our own internal review of the matter and in doing so, discovered that the RAC employee involved, is no longer with their company. They offered to credit our customer $150 for the problem which the customer represented to be a $300 matter. Because we wanted to be more than fair in the matter, and it did appear as if the RAC employee misrepresented the matter, we cooperated in the settlement on our customers behalf.
We welcome any other questions you may have.