Rent-to-Own Bill Headed to the House of Representatives

Last week the Vermont Senate passed legislation to bring necessary consumer protections to the rent-to-own industry. The bill passed on a unanimous voice vote and now heads to the House of Representatives. These businesses rent out home goods such as couches, refrigerators and televisions to consumers at a premium price, giving consumers the ability to own the items after the customer makes enough payments. Over the years the industry has raised concerns among consumer and low income advocates for charging exorbitant rates, and engaging in aggressive collection packages.

S.73 improves the rent to own industry in Vermont with a number of requirements that make the industry more consumer friendly. One of the most important changes found in the bill is a cap on the total cost that can be charged for these products. This would put a stop to the practice of charging three to four times the original cost of the item before being able to take ownership. The bill also institutes a number of best practices that will help curb overly aggressive collection practices. Finally, the bill would give consumers up to six months to reinstate their payments without losing the money that have already invested in the item.

The bill is now in the House Economic Development where action is expected in the next couple weeks. For a full report on the bill with comments from VPIRG’s Consumer Protection Advocate Falko Schilling, click here.