AG Labrador Announces $183.5 Million Multistate Settlement with Rent-to-Own Finance Company Acima Digital, LLC

BOISE, ID - Attorney General Raúl Labrador today announced a $183.5 million multistate settlement with Acima Digital, LLC and its direct parent company, Acima Holdings, LLC. The settlement consists of $43 million in direct restitution for the benefit of consumers, a $10.5 million payment to the states, and lease balance reductions for consumers totaling $130 million. Acima is a rent-to-own finance company that partners with retailers to offer financing to Idaho consumers via rental-purchase agreements. The settlement resolves allegations that Acima deceptively advertised its rental-purchase agreements, deceptively marked up the cash price of the merchandise being rented, and other deceptive acts and practices with respect to its rental-purchase agreements, debt collection, and credit reporting.

"Acima deceived their customers with misleading business practices, concealed long-term leases, and confusing cancellation terms," said Attorney General Labrador. "This settlement gets money directly back to the Idahoans harmed and puts Acima on a path towards compliance with our consumer protection laws."

Under the terms of the settlement, 748 Idaho consumers will receive direct restitution totaling $202,354 and 234 Idaho leases will be forgiven, totaling $263,901. The State of Idaho will also receive $97,706 as part of the multi-state agreement.

The multistate coalition alleged that Acima marketed its rental-purchase agreements as 90-day pay off programs without disclosing that consumers were automatically defaulted into the maximum 12-month term whereby consumers could pay approximately two times the cash price advertised by Acima's retail partner. Acima also advertised its rental-purchase product using terms like "credit," which often misled consumers into believing that they were obtaining traditional financing. Acima's process for electronically executing rental-purchase agreements also obscured the terms of the transaction, further compounding consumer confusion. Additionally, Acima obstructed consumers' ability to terminate their rental-purchase agreements without penalty by returning their merchandise to Acima.

Under the settlement, Acima has agreed to injunctive terms to address these practices, including:

• Conduct robust training of its retail partners;
• Refrain from making certain representations in its advertising unless other material information is clearly and conspicuously disclosed;
• Refrain from obscuring the material terms and conditions of its rental-purchase agreements during Acima's electronic signature process;
• Refrain from marking up the cash price from that of Acima's retail partners;
• Refrain from obstructing consumers' ability to terminate their rental-purchase agreements by returning the merchandise to Acima;
• Refrain from reporting rental-purchase agreements to the big three credit reporting agencies for a period of five years; and
• Properly handle late deliveries, merchandise damaged at the time of delivery, and adhere to legal obligations to make repairs to merchandise during the lease.

Consumers who are eligible to obtain restitution or lease forgiveness pursuant to this settlement do not need to take any action. Consumers eligible to receive restitution will be contacted by the settlement administrator. Consumers who are eligible to receive lease forgiveness will be contacted by Acima.

The settlement can be read here.