Published: March 2020

Stop the debt trap by implementing stronger regulations on rent-to-own stores

With limited or no access to credit and savings, low-income consumers often turn to rent-to-own (RTO) stores for big-ticket items like appliances. RTO stores notoriously charge customers two-to-three times more than traditional stores for the same items, leading to more purchase defaults, capturing the consumer in a debt trap. Coalition members joined together in urging the Federal Trade Commission to do more to protect low-income communities from the predatory practices utilized by the $8.2 billion a year RTO industry.

A weak settlement administered by the Federal Trade Commission (FTC) on three major rent-to-own businesses prompted consumer advocates to call on the FTC to take a closer look at the predatory nature of the rent-to-own industry. The RTO industry notoriously overcharges customers two to three times more than traditional stores for the same items, leading to more purchase defaults and debt traps.

Lead Organization

National Consumer Law Center (NCLC)

Other Organizations

National Consumer Law Center | Consumer Action | Consumer Federation of America | National Association of Consumer Advocates | National Consumers League | Open Markets Institute | U.S. PIRG

More Information

For more information, please visit NCLC.

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Stop the debt trap by implementing stronger regulations on rent-to-own stores   (FTC_-_RTO_Store_Swaps_Comments.pdf)