Rental Ripoff ??

The rent-to-own store has evolved into a payday loan service in sheep’s clothing. But it wasn’t always that way.

There’s no reason the rent-to-own model, one famously used by Rent-A-Center among other chains, needed to fall into the realm of “predatory.”

Admittedly, that’s what happened, but the model didn’t start that way. The goal was initially much more noble than that.

In 1930 the British company Radio Rentals launched with the goal of making radios more accessible by allowing consumers to rent them out for an extended period, rather than buying outright.

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For many customers in the U.K., it made both radios, and later televisions, something that the average consumer could reasonably access without paying dearly for the privilege. It was such a successful business that, according to an estimate in a 1962?Time?article, 80 percent of British television sets were rented, well above the rate seen in the U.S.

“The British believe that rented television has notable advantages, even for those who could well afford to buy,” the article stated.

But a lot changed between the 1960s, when rental businesses had their high point in Britain, and the 1980s and 1990s, when Rent-A-Center saw its peak.

If one had to nail it down, it might be?the rise of credit cards, which made it possible for people to buy products from higher-end stores while still, technically, “renting-to-own” the final product. And that meant that Rent-A-Center’s value proposition didn’t make sense for customers that had decent credit.

Which meant that Rent-A-Center, if it was going to find a customer base, needed to focus on customers with bad credit or no credit. In other words, the company was essentially incentivized to focus on predatory business practices. The company took on all the risks, so they were in a position where they could jack up prices over a long period.

Over time, you may pay twice as much, if not more, for the same product as if you just bought it on Amazon.

These practices have proven highly controversial over time—which, perhaps, explains why the company rebranded just a few weeks ago. It’s now known as?Upbound, with the goal of offering “flexible financial solutions to a wider range of consumers.”

I’ll let you determine the brand-speak.

? Wanna learn more??Check out our 2017 piece?on the rent-to-own model’s dirty little secret.