On July 26, 2024, the Consumer Financial Protection Bureau (CFPB) announced that it filed a complaint against a point-of-sale financing company and its former chief executive officer in the United States District Court for the District of Utah. The complaint alleges that defendants’ “virtual rent-to-own” product uses misleading marketing and abusive enrollment practices that target consumers with poor or limited credit, locking them into costly financings of household goods. The complaint further alleges that defendants reported inaccurate information about such financings to consumer reporting agencies (CRAs) and that these lending activities have been connected to as many as 5 million consumer financing agreements since 2015. According to the CFPB, this alleged conduct violated the provision against deceptive, unfair, and abusive acts and practices (UDAAP) under the Consumer Financial Protection Act (CFPA), the Electronic Fund Transfer Act (EFTA), Regulation E, the Truth in Lending Act (TILA), Regulation Z, the Fair Credit Reporting Act (FCRA), and Regulation V. The CFPB further alleges that the company’s former chief executive officer provided substantial assistance in violating the CFPA.
Among other things, the CFPB seeks injunctive relief preventing defendants from committing future violations of consumer protection laws as well as monetary relief such as to rescind and reform financing agreements, refund monies paid, and offer restitution or disgorgement.
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