August 2, 2024

CFPB Alleges Deceptive Practices by Lease-to-Own Finance Company

Cozen O'Connor

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Cozen O'Connor

The CFPB sued point-of-sale financing company Acima Holdings, LLC, its former CEO, and other affiliate entities (collectively, “Acima”) for allegedly using false marketing and deceptive dark patterns to lure consumers into high-cost lease-to-own finance agreements, violating the Consumer Financial Protection Act, Electronic Fund Transfer Act, Truth in Lending Act, and the Fair Credit Reporting Act.
According to the complaint, Acima purchases household goods selected by consumers from independent merchants and then claims to “lease” the goods to consumers. The CFPB alleges that Acima disguised its credit agreements as “leases” to evade consumer financial protection laws and designed its application process to obscure the nature and cost of the product, locking consumers into financial obligations exceeding 200% of the retail price.
The CFPB claims that Acima aggressively marketed its financing agreements while obscuring the true costs, relied on merchants to explain contract terms without adequate training, and misrepresented consumers’ payment obligations, making it difficult to terminate the agreements. Acima also allegedly reported inaccurate financing information to consumer reporting agencies and failed to provide mandatory disclosures about finance charges and annual percentage rates.
The CFPB seeks a permanent injunction preventing Acima from future deceptive conduct related to their financing agreements, as well as consumer redress, civil penalties, and other relief.
CFPB has also sued lease-to-own finance company Snap Finance LLC on similar grounds, as previously reported.

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