Attorney General Mayes Announces $183.5 Million Multistate Settlement with Rent-to-Own Finance Company Acima Digital, LLC

PHOENIX – Attorney General Kris Mayes announced today a $183.5 million multistate settlement with Acima Digital, LLC and Acima Holdings, LLC, which together operate Acima, a rent-to-own finance company that partners with national furniture and auto repair retailers nationwide to sell goods to consumers via rental purchase agreements.

This settlement resolves allegations that Acima its retail partners marked up the prices on these agreements and misled consumers regarding the contents of these agreements in violation of national consumer protection laws including the Arizona Consumer Fraud Act. This settlement will require Acima to immediately put an end to these deceptive and exploitative practices. Arizona consumers harmed by these unlawful agreements will receive approximately $1.56 million in direct restitution payments as well as lease balance forgiveness totaling over $4.65 million for consumers across the state.

“Acima misled Arizona consumers with hidden markups and fees buried in its rent-to-own lease agreements. Families were led to believe they could pay off their purchases in a short window at no extra cost, but many were placed into long-term payment plans with higher charges, often without their knowledge,” said Attorney General Mayes. “Arizonans are already struggling to make ends meet and shouldn’t have to worry about being taken advantage of. Companies must be upfront and honest with Arizonans, or we will hold them accountable.”

Acima led consumers at national retailers such as Ashley Home Furniture to believe they were purchasing goods as part of an installment plan or on credit as part of a “same as cash” sales transaction. In reality, the documents that these consumers signed were rental purchase agreements with strict payment plans that, if made in full, would cause consumers to pay more than twice the cash price advertised by the retailer. Consumers who missed payments would risk repossession of their home furniture and motor vehicle components by Acima. Additionally, these agreements prevented consumers from avoiding the excessive markups and fees imposed by Acima paying off their balances ahead of schedule.

Consumers who signed these deceptive agreements and missed payments were then subjected to unfair and unlawful debt collection practices including threats of repossession, aggressive (and often inaccurate) reports to credit agencies, and attempts to collect upon false debts such as debts for merchandise which was damaged when consumers received or simply not received at all. Acima promised consumers that it would repair or replace damaged or defective merchandise and then refused to do so, instead sending consumers to collections for the full value of the agreements despite having not delivered on their end of the contract.

Under the settlement, Acima has agreed to implement and maintain a number of practices designed to prevent it from engaging in further unlawful misconduct, including to:

• Train its retail employees to truthfully answer consumers’ questions and adequately explain the terms of the agreements they are offered.
• Restrict the ways in which it is allowed to advertise its purchase agreements to agreed upon content and formatting.
• Make all required agreement disclosures clearly, visibly, and in a manner compliant with state and federal law.
• Prohibit markups to the retailer’s advertised cash price in its purchase agreements.
• Allow consumers to terminate their purchase agreements by returning the purchased merchandise and to inform consumers on how to make such returns.
• Prohibit any reporting on purchase agreements signed after the settlement agreement date to any of the big three credit reporting agencies for a period of five years.
• Explain to consumers how Acima shall handle late deliveries, damaged merchandise, and merchandise repairs.

Arizona joined 42 other states across the country as part of a nationwide bipartisan investigation into Acima’s business practices which began in approximately April of 2021. This investigation revealed a litany of federal and state consumer protection law violations, particularly in relation to Acima’s deceptive use of rental purchase agreements, Acima’s reckless debt collection practices, and Acima’s aggressive practice of attacking its customers’ credit scores. The multistate settlement puts a stop to these practices and will provide debt relief and compensation for the consumers who were harmed.

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.

A copy of the consent judgment is available.