Rent-to-own deals may only shine on the surface
BBB recommends using caution with rent-to-own companies
Buying furniture and appliances can be a daunting task for those with little or no credit. Such items are considered necessities and can carry large price tags. Securing financing can also be difficult as many credit providers are hesitant to provide loans since the economic downturn.
As a result, consumers may turn to rent-to-own stores that offer big-ticket items for low weekly or monthly payments with no credit check. However, Better Business Bureau advises consumers read and understand rent-to-own contracts completely before signing.
Nationwide, BBB processed more than 900 complaints regarding rent-to-own companies from January to October of this year, alleging problems with customer service, collections, quality of the merchandise and more.
Big mark ups are common for rent-to-own companies and many advertise payment amounts, not the full payoff amount. Several of the most recognizable companies list products on their websites, television, print and radio commercials, but not prices.
For many customers, the convenience of low regular payments is worth the inflated price. However, BBB suggests consumers consider how such a purchase will affect their credit.
Rent-to-own companies can put late payments on a consumer’s credit report, and may have aggressive collections policies. Consumers should be sure they can make the regular payments before agreeing to a contract.
BBB also advises consumers to inspect the merchandise closely before making a purchase. Some consumers have complained to BBB about the poor quality of their goods.
BBB offers the following advice when shopping for furniture and appliances:
· Shop around. The prices at many rent-to-own establishments can be high even when consumers buy their products outright. Check the prices at other stores before committing.
· Avoid finance charges. When possible, pay in full at the time of purchase or shop around for zero percent interest, same-as-cash offers. If you must pay over time, multiply the number of payments by the payment amount to calculate your total cost, then decide if you think the item is worth that price.
· Consider buying used. Second-hand shops can have quality merchandise for deeply discounted rates. Also check classifieds in print and online for people selling items they no longer use. Some people are even looking for someone to take items off their hands for free. However, remember to take extra precautions when dealing with people you don’t know.
· Use a credit card. Interest rates on credit cards can be lower than you would pay for a rent-to-own deal, and you can dispute the charges if you are unhappy with the product.
· Look into layaway. Many major retailers are offering layaway programs that allow consumers to pay off a purchase in small payments, without the mark-up of rent-to-own stores or the interest that comes with credit. Such programs may be a great option for those with poor credit.
To check the reliability of a company and to find trustworthy businesses visit bbb.org.
About Better Business Bureau:
BBB's mission is to be the leader in advancing marketplace trust. BBB accomplishes this mission by creating a community of trustworthy businesses, setting standards for marketplace trust, encouraging and supporting best practices, celebrating marketplace role models and denouncing substandard marketplace behavior.
Businesses that earn BBB Accreditation contractually agree and adhere to the organization's high standards of ethical business behavior. BBB is the preeminent resource to turn to for objective, unbiased information on businesses and charities.
Contact BBB Southern Nevada at (702) 320-4500.
###