Earlier this month, VPIRG joined a bipartisan coalition of lawmakers and advocates for low income individuals, children, the elderly and socially responsible business in calling for reforms to Vermont’s rent-to-own industry. S.73, a bill that would reign in some of the most egregious industry practices, is now in front of the Senate Economic Development Housing and Military Affairs Committee. The committee is looking at ways to ensure necessary consumer protections in Vermont’s rent to won industry.
Over the last decade we have seen a significant increase in the number of rent-to-own stores such as Rent-a-Center and Aarons. Just as the name implies these stores rent household items like couches, washers and big screen TV’s, giving consumers the opportunity to rent the items and eventually own them. The problem with this system is that low income individuals can end up paying many times the original price of the original item- far more than they would pay if they purchased the item from a traditional retail establishment. These businesses often advertise to low income individuals who have limited financial literacy, and the least ability to pay inflated prices from these goods. This is why VPIRG is supporting commonsense reforms to protect and better inform consumers entering in to rent-to-own contacts.
One of the most important changes we are looking for is a cap on how much rent-to-own businesses can charge their customers above the original wholesale price. This would stop retailers from requiring consumers to pay three or more times the original price of the product, something that does not happen infrequently. We are also supporting measures to better inform consumers about the age of the products they are renting and the number of times that the product has been rented before. This essential information will let consumers make informed decisions about the products they rent, just as consumers can do when they choose to lease or buy a car. Another important protection we believe is necessary is extending the period that consumers have to reinstate their rental agreement if they have to stop payments for any reason.
The bill is expected to be voted on by the committee soon after the legislature returns from the town meeting break and then head to the Senate floor. Check back for the latest updates on our efforts to consumers are better protected and informed before entering in to rent-to-own agreements.
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