NEW YORK — New York Attorney General Letitia James has filed suit against Acima Digital, Acima Holdings and Acima Solutions for allegedly “deceiving” more than 100,000 New York consumers and violating the state’s rent-to-own law by “leasing” goods that could not be returned, charging more than the allowable amount on goods, and misleading consumers about the cost of financing provided by Acima.
“These dishonest actions resulted in New York consumers enrolling in contracts that more than doubled the price of items they were trying to buy,” the NY AG’s office said. “The lawsuit seeks to end Acima’s deceptive business practices, secure civil penalties, and collect restitution for impacted consumers.”
‘Virtual Lease-to-Own Company’
Acima, which the New York AG said calls itself a “virtual lease-to-own” company, has operated in New York since 2015, and has entered into more than 150,000 New York transactions with more than 100,000 New Yorkers.
“The company does not carry an inventory of goods but rather contracts with retail stores and e-commerce outlets to offer financing to consumers for items like furniture, eyeglasses, appliances, and tires,” the Attorney General’s office said. “In 2021, Acima was acquired by Rent-A-Center but has continued to use the same business model. Consumers were led to believe that Acima’s contracts were loans or credit, but later learned these contracts were supposed leases that required consumers to pay exorbitant interest rates of 100% or higher.”
The Allegations
The OAG lawsuit alleges:
- Charged consumers for merchandise that was never delivered or delivered damaged
- Debited consumers’ bank or credit card accounts after they revoked authorization to do so
- Misled consumers about the cost of the financing provided by Acima
- Made false threats to sue consumers and repossess their merchandise
- Used the term “Acima Cash Price” to hide from consumers a markup that Acima added even before adding the usurious “rental” fees
- Imposed unnecessary “processing” delays when consumers wanted to make payments, which often led to additional costs to consumers
- Failed to make legally required disclosures to consumers, such as ensuring tags were attached to merchandise that revealed the cost of “leasing,” and omitting the cash price from anywhere a consumer would likely see it
- Misrepresented the effect of “renting” on consumers’ credit reports.
Company Responds
In response, Plano, Texas-based Acima, said that “Notwithstanding active and ongoing settlement discussions between the parties, the NYAG suddenly and inexplicably filed its lawsuit today. Following the NYAG’s precipitous and unwarranted action, Acima will vigorously defend itself against these allegations, many of which relate to historical periods prior to Upbound’s acquisition of Acima and which include the NYAG’s attempt to recharacterize well-established lease-to-own transactions as lending transactions contrary to established law.
“Lease-to-own transactions are among the most flexible and inclusive shopping options in the market, serving millions of consumers a year across the country,” the company continued. “Acima looks forward to presenting its case to the court.”