Rent-A-Center to pay $9M to settle ‘abusive’ debt-collection allegations

Rent-A-Center settlement overview:

• Who: Rent-A-Center has agreed to pay nearly $9 million to settle allegations by the Massachusetts attorney general’s office.
• Why: The commonwealth had accused Rent-A-Center of engaging in a variety of “abusive” debt-collection practices.
• Where: The Rent-A-Center debt-collection settlement was filed in the Superior Court of the Commonwealth of Massachusetts, Suffolk County.

Rent-A-Center Inc., a company that leases furniture and appliances to consumers, has agreed to a nearly $9 million settlement that will resolve “abusive” debt-collection allegations, Law360 reports.

The Massachusetts Attorney General’s Office announced Nov. 28 that it had reached the million Rent-A-Center settlement, which will resolve claims the company engaged in a variety of “abusive” debt-collection tactics.

The Rent-A-Center debt collection abuses allegedly involved the company filing criminal theft reports against customers who missed payments, excessively calling customers for debt-collection purposes and failing to notify consumers ahead of time about home visits or repossession attempts.

“The attorney general alleges that in some instances, RAC employees pounded on doors and windows, turned doorknobs to see if exterior doors were unlocked and demanded to be let in,” the Rent-A-Center settlement agreement states.

Rent-A-Center settlement requires company to change debt-collection practices

Rent-A-Center did not admit wrongdoing, but the company agreed to pay an $8.75 million settlement and make “significant” changes to its business practices.

The Rent-A-Center settlement terms prohibit the company from filing criminal complaints against customers who fail to return rented items or who miss payments. The company also agrees not to visit consumers at their homes for debt-collection purposes more than once in a 30-day period for each debt.

Rent-A-Center also agreed not to use vulgarity in its debt-collection practices, not to use prepaid cell phones or other devices to disguise its identity when collecting debts and not to deliberately damage or disable merchandise in the course of its debt-collection practices.

Additionally, Rent-A-Center agreed to train employees to comply with the settlement terms, establish regular compliance checks, and provide annual reports to the attorney general’s office for the next three years, the settlement documents state.

“I am proud of my team’s dedication in securing a settlement with Rent-A-Center, which sadly utilized egregious tactics to target and exploit low-income communities for profit,” Massachusetts Attorney General Andrea Joy Campbell said.

Bank of America recently agreed to pay $500,000 to settle a class action lawsuit alleging it violated Florida law by sending late-night communications to consumers for debt collection purposes.

What do you think about the Rent-A-Center settlement? Join the discussion in the comments.

The commonwealth is represented by Yael Shavit of the Massachusetts Attorney General’s Office.

The Rent-A-Center debt collection lawsuit is Commonwealth of Massachusetts v. Rent-A-Center Inc., Case No. 2384CV02703, in the Superior Court of the Commonwealth of Massachusetts, Suffolk County.

Read About More Class Action Lawsuits & Class Action Settlements:

• American credit card debt hits record $1.08 trillion, report finds
• Consumer watchdog releases potential new rules banning medical debt from consumer credit reports
• CFPB seeks $3.1B judgment against credit repair companies it claims unlawfully charged consumers
• Debt-collection company data breach affects 500K people with past-due Bank of America accounts