Are "Rent to Own" places doing anything unethical?

[Rabrrrrrr]

Listening to a story on NPR now about it, and how when one rents to own one ends up spending about 2.5-3.0 times the actual price of the item.

I don't think there's anything wrong with it - if people want to rent, let 'em rent. If they don't feel a need to do the math, then too bad for them. It's simple - it goes like this:

"How much a month for this TV that I can get at Best Buy for $300?"

"$20"

"How many months?"

"36"

At that point, the renter can say "Hmmmm, that's $720...", or even ask the guy "How much will I spend over that 36 months?" or the renter can say "Okay".

Either way, the onus, as far as I am concerned, is on the renter.




On the other hand, if authorities decide to come down and call rent-to-own usury - then let's go after the banks, from whom on a home loan, one ends up paying for one's house 2-3 times.

[KitchenWitch]

1. Unfortunately Rent to Own places capitalize on the poor

and those with bad credit.

Yes it is unethical...

[WeRQ4U]

2. But so do credit card companies, mortgage lenders, consolidators etc....

sometimes. I'm not really sure that it's UNETHICAL per se. They are providing a service to people who cannot afford, or would rather not buy things all at once. It's definetly not a good deal by any means. I must also say that they do a large bulk of their business with hotels, real estate agencies (for models) and business people (temporary housing).

Personally, I don't think it's any more "unethical" than allowing companies like Merk or Ely Lilly to prey on the sick by continuing to produce things to prolong and manage diseases when they have both the manpower and money to produce cures.

[MsAnthropy]

3. It's a HUGE scam perpetrated against the poor

who don't have a bank account or credit to buy something outright. People will overlook "doing the math" if they want something badly enough. That's like saying "who cares how high apartment rents go, you should have bought a house when they were cheap." It's not only unethical, it's immoral.

[petronius]

4. I think it's pretty scummy

although not quite to the level of payday-loan or check-cashing places. However, it does seem like the customers generally are making a very poor decision. I've never been in one, but what I see advertised does not appear to be necessities. About the only appliance that I can imagine would be worth buying from one of those places might be a washer/dryer - even with the usury you might save money on laundromats.

There's a RTO place near here that has TV commercials that blare "FREE UNTIL SEPTEMBER 17TH!!!" which really cracks me up - yippee, no interest for five whole days...:eyes:

[DS1]

5. A know a guy who was a repo man for a rent-to-own place

Didn't trust him for a moment, partly because his job entailed breaking into people's houses if payments were just days late and taking the TV - and all that money that had gone into buying the appliance was immediately zeroed out. It's a scummy policy. He ended up ripping off his friends while they were at work then leaving town.

Sure, I can understand that for 20 bucks you can get a computer, or nice 42" plasma teevee, but if you can't afford one in the first place it might be a wise choice to invest in something more sensible.

[Deja Q]

6. Capitalism is its finest.

After all, Christmas is about giving expensive gifts. Not being with family and friends and celebrating not just life, but the Man who died to save our sins (yet He isn't dead and judging by the actions of many today He died in vain :cry: )...

[Squatch]

7. I agree

That's why the Truth in Lending Act was passed into law, so that all disclosures regarding payments, interest, fees, etc must be made to the lendee.

If you don't want to pay 2 to 3 times more than the object is worth, don't buy it on credit.

[JVS]

8. If you are a big enough sucker to go in for it, you deserve what happens.

[jumpoffdaplanet]

9. It's on the same level as those check places

it's all legalized theft.

[CBGLuthier]

10. Yes, its unethical and immoral

If they were truly in the renting game it would be one thing.

But they cater to those who have the worst credit and take advantage at a rate that would be illegal if it were a loan.

[ET Awful]

11. They walk a very thin line between legality and usury.

They're no better than payday loan joints.

[skygazer]

12. Ah, but the people who use these places can't afford $300 all at once

They look at their measly paycheck and see that they can afford $20 a month. Sure, they could put $20 a month away and save the $300 over time but when you bring in less than what you generally pay out, that math doesn't work well either. Poor people have a hard time saving money because there's ALWAYS a place for that money to go. And poor people are the ones who mostly utilize those rent to own places.

Yes, I think it is unethical. The company is making over a 100% profit on that TV and bleeding some poor family at the same time. I have nothing against making a reasonable profit but that's not reasonable.


"Either way, the onus, as far as I am concerned, is on the renter."

Sure, blame the poor people. Why not?

[Rabrrrrrr]

18. Yes, but they're also not buying anything that's essential

to stay alive or to live.

Stereos, TVs, etc., are not requirements for living.

Do these places prey on the poor? Sure they do, they're an easy mark and no one else, except hotels and businesses etc., are dumb enough to rent from them - and those places aren't interested in the "owning" part, just the renting part.

And this is why I ask the question - on the one hand, they're up front, it's obvious one is paying too fucking much for stuff, and none of it is stuff that is a requirement for life. On the other hand, they are definitely taking advantage of people. On the other other hand, they aren't taking advantage of anyone in an emergency or life-threatening situation. No one's making them rent from there.

So, I'm not blaming poor people. But I am saying that anyone who does this, is making a choice on their own, and have no right to complain.

[LeftyMom]

13. They tend to inflate the retail value of thier stuff

to make the deal look somewhat reasonable.

I had a customer come in once at the electronics shop where I worked. She'd just looked into a rent-to-own deal for a camcorder and the shop told her it was worth $800, so she stopped by to see if it really was worth that much. We had the very same camcorder on sale for $260, regular price was $299. It was the cheapest model we carried and hardly anybody bought it becase much nicer camcorders could be had for only a little more money. I sold her a slightly more expensive camcorder (I think it was about $350 on sale, the normal price was $399) that actually did what she needed it to on layaway and she had it paid off within a month.

She was a young mother of apparently modest means and it pissed me off that somebody'd lie to her and rip her off like that. She was beaming when she came into make her last payment and pick the camera up, she was really young and it wouldn't surprise me if it was the first nice thing she'd ever saved up and bought for herself.

[Inland]

14. Most states have requirments for disclosure and options to buy outright

So in reality, almost all are able to have just that conversation.

[BiggJawn]

15. Yes, but the disclosure doesn't have to be in any dialect...

That can be understood without 3 years of Law School.

Or, how about if you're fluent only in Spanish, and you're given a paper that has "wherein the Party pf the First Part (herein referred to as "Rat Bastard") does enter into a usury agreement with the Party of the Second part (herein referred to as "SUCKAH!!!")..." and told "Just a formality, Hombre!"

Barely Legal.

[Floogeldy]

16. This is why I am not a pure capitalist

A free market, where the elites have all of the money and the poor are forced to be beholding to them, is not free at all.

It is not the banks. It is the businesses renting to the poor.

If I were king, corporations would conduct business in the interests of the public; not in the interests of maximum profits.

I'm totally correct on this issue.

[sendero]

17. Just like..

.... "We finance" car lots, I think 90% of the people who buy there know they are paying extra. They do it because they want the item bad enough to pay extra, and there is no other way they can get it.