The other night I was up late not feeling well, just surfing through the channels half conscious when this commercial came on that grabbed my attention. I saw a nice, low-key gentleman begin talking to me about all of the financial issues facing American families today. He talked about foreclosures, lost jobs, and the fear some are feeling about their futures. He began talking about living a credit free life and how you can make it through this world without the need for credit. By this time I was sitting on the edge of the couch, and with full awareness and attention, I started to think, “Hey this guy gets it!” I even started to feel motivated that there are others out there that are trying to offer solutions to their neighbors in time of need… but then he dropped the bomb.
I should have known. After all, no matter the circumstance, no matter the conditions, there is always room for an angle… room for profit at the expense of another. This humble-looking gentleman then introduced himself… “Hello, my name is Mark Speese, CEO of Rent-A-Center”. He continues… “Rent-A-Center has allowed millions of American’s to buy name brand merchandise without credit for more than 30 years, and what I believe makes a whole lot of sense, for a whole lot of folks, especially at times like these.” “No matter your credit standing, one things for sure, your family is always going to need things… folks still need washer and dryers, kids still out grow their beds, and those same kids are wearing you down about that new TV they’ve been wanting.” (insert slight wink) “Enjoy the things your family wants and needs without the burden of credit.”
He goes on to say that you can learn how to live a credit free life by going to their website, creditfreelife.com. I know we are consumers, I mean that’s our job right? We are told each day on the radio, on TV, and in newspapers that if the “consumer” quits spending altogether, our economy will collapse! I guess if that’s true, Mr. Speese would be a hero, no?
Let’s examine the facts.
The folks over at PIRG (Public Interest Research Groups) seem to have a different view of Rent-A-Center than the almost philanthropic message of Mark Speese. Judge for yourself:
http://www.pirg.org/consumer/rtoloan.htm
Problem: The predatory rent-to-own industry promises consumers the American dream of ownership. “For only 78 weekly payments of $10, you, too, can own this television.” The industry doesn’t tell you that the that the effective interest rate on that loan, however, is 220%APR with $560 in interest and finance charges.
Many states have enacted industry-friendly laws that allow the rent-to-own industry to deceive consumers by disguising their loans as rentals. But a few states enforce tough consumer protection laws. New Jersey PIRG has helped defend its strong law for years.
Unable to win in the state legislatures, the RTO industry has asked Congress to preempt, or over-ride, those strong state consumer protection laws and replace them with a weak industry-friendly federal law.
Background: The multi-billion dollar rent-to-own industry (Rent-A-Center, Rentway and others) sells televisions, appliances, computers, jewelry and furniture by making consumers loans payable on a weekly or a monthly basis. A television with a market value of $220 typically requires 78 weekly payments of ten dollars, or a total of $780. A customer who rents-to-own, or purchases, that television has paid $560 of finance charges at an imputed annual percentage rate (APR) of 220%. But the industry contends it does not sell. It claims it only rents, because if a consumer wants to stop making payments, he or she can do so and return the goods without further payments. RTO stores generally refuse to comply with state usury ceilings or interest rate disclosure laws such as the Truth In Lending Act. The industry, over the years, has also been accused of selling used goods as new, tacking on deceptive add-on fees and worse, bullying and sometimes illegal tactics when consumers are late with payments.
Over ten years ago, RTO operators convinced about 45 states to enact weak legislation that treats rent-to-own as a lease. Yet, several states — backed by consumer groups — insist on treating rent-to-own sales as small loans, requiring compliance with usury ceilings (New Jersey), APR disclosures (Vermont), or other consumer protection provisions (Minnesota, Wisconsin, North Carolina).
I urge you to recognize the real problem so that the real solution may present itself. Mark Speese is disguising the real problem behind a fake solution at your expense. Living a credit free life is not changing your habits from buying things with credit to buying things without credit! Living a credit free life involves buying only what you need with cash and leaving credit alone completely. I can assure you, those living in the US today without credit card debt are not nearly as worried about their personal financial situation as the average consumer in this country.
Everything begins with recognizing that we need to break our dependency on credit and spend less and save more. Rent-A-Center is just another shameless company eager to release you of your hard earned money by employing a despicable diversionary tactic with creditfreelife.com.
I urge you to take control of your own situation. Be smart. If you are in debt, ask yourself why? In most cases, if you honestly answer that question, the solution will become clear.
There is no substitute for personal responsibility and hard work, and there are many people, including myself, that are with you every step of the way!
