Acima Digital LLC and its parent company, Acima Holdings LLC, have agreed to a $183.5 million multistate settlement addressing allegations that the rent-to-own company misled consumers about the cost and length of agreements for furniture, electronics and other merchandise.
The agreement was reached with a coalition of 43 state attorneys general led by Tennessee Attorney General Jonathan Skrmetti. The states alleged that Acima promoted some transactions as programs allowing customers to pay off purchases within 90 days, while failing to make clear that consumers could otherwise remain in rental arrangements for as long as 12 months.
According to the states, the longer arrangements could cause consumers to pay about twice the merchandise’s advertised cash price. Investigators also alleged that Acima used the word “credit” in ways that could give shoppers an inaccurate impression that they were receiving traditional financing.
What the agreement provides
The settlement divides the financial relief among consumer payments, reductions in outstanding lease balances and money paid to participating states:
| Relief or payment | Amount |
|---|---|
| Direct restitution for eligible consumers | $43 million |
| Reductions in lease balances | $130 million |
| Payments to participating states | $10.5 million |
Tennessee’s portion includes more than $52 million, including $805,746.26 in consumer restitution and $3,966.10 in lease-balance reductions, according to the attorney general’s office. The agreement states that eligible consumers do not need to take action to receive the settlement’s benefits.
“Companies need to do right by Tennessee consumers. This settlement puts money back in consumers’ pockets and makes Acima change its ways.” — Tennessee Attorney General Jonathan Skrmetti
Changes required under the agreement
The states said Acima’s electronic contracts did not present important terms clearly enough and that the company made it difficult for customers to return merchandise and end their agreements. The investigation also alleged that Acima increased cash prices above the amounts set by retailers.
Under the agreement, Acima must make several operational changes, including:
- Give consumers clearer information in advertising and electronic contracts.
- Improve instruction for retail partners.
- Stop raising merchandise cash prices above retailer-set prices.
- Make it easier to end agreements by returning products.
- Meet requirements involving deliveries, damaged goods and repairs.
- Stop reporting rent-to-own agreements to the three major credit reporting agencies for five years.
The credit-reporting provision is significant because information furnished to credit bureaus can be used in consumer credit reports and may affect how lenders evaluate applicants. The agreement’s stated five-year pause applies to reporting the rent-to-own agreements; the materials provided do not describe a broader prohibition on all information about consumers.
Rent-to-own transactions generally allow a customer to obtain merchandise while making recurring payments under a rental contract, with ownership potentially available under the contract’s terms. Unlike a conventional loan, the structure can combine rental payments, purchase options and early-payoff conditions. The state allegations focus on whether Acima adequately explained those features and the total amount consumers could pay.
Acima agreed to the settlement after the multistate investigation. The allegations described by the states are not presented as a court finding of wrongdoing. The agreement requires the company to change its marketing, contracting and servicing practices while providing the financial relief outlined by the participating states.
