Rent to Own Hotline:
Will the N.J. Legislature:
Record Opposes Rent to Own bills
Philadelphia Inquirer calls RTO bills "wood rot" and "bad legislation"
Home News Tribune says the poor should get the same consumer protections as the middle class enjoy
N.J. Suits on Rent to Own- All Courts Find Consumer Fraud
What is the N.J. Attorney General doing?
Why is Governor Whitman silent?
Suit Challenges Attorney General to enforce the criminal usury law
CLNJ Opposes A.1097/S.1343
CLNJ Supports A294/S.1491
What do normal merchants charge for electronics, etc?
How does A.1097/S.1343 legalize criminal usury?
Rent to own is a civil rights issue
NAACP Opposes bills A.1097/S.1343
How did Legislators vote in 1998?
Rent to Own Educational Campaign
CLNJ Home Page
The ultimate scam:
Rent to Own Defeated in N.J.
The bill would permit Rent to own stores to sell $250 TVs for $960, at undisclosed 369% interest, to inner city residents, while suburbanites buy the same TVs for $290 on 21% credit at Sears. Separate and unequal prices for the poor amounts to discrimination, pure and simple.
After years of factfinding and deliberation, the N.J. Judiciary is unanimous that rent to own violates the N.J. Consumer Fraud Act:
A vote for A.1097 is a vote to legalize
consumer fraud and criminal usury.
Persons to wish to rent will still
rent. Persons who wish to buy, will no longer be fleeced, as
they switch to merchants who charge less than 30% interest. If
consumers prevail, then RTO customers will pay $200-$300 for
their televisions instead of $960.
CLNJ calls on the Whitman administration to protect the poor and urban minorities, who are the main customers of rent to own, by announcing opposition to A.1097/S.1343. The representatives of Governors Kean and Florio opposed similar RTO special interest bills, which failed to pass for ten years in the Legislature. State government ought to prosecute criminal usury violations, not legalize them, not create loopholes encouraging criminal usury.
What do normal merchants charge
for electronics, etc?
Competitive merchants in the NJ region take their acquisition cost, then add 10% to 20% to get a fair market price, i.e., the average price charged by honest merchants. Competitive merchants always charge much less than "Manufacturer's Suggested Retail Price." Competitive interest rates for credit sales are apx. 21% for large chains such as Sears, and up to 30% for small inner city merchants, such as furniture stores. Honest merchants charge less than 30% APR, which is New Jersey's criminal usury maximum. N.J.S.A. 2C: 21-19.
How does A.1097/S.1343 legalize criminal usury?
Section 15 of the bill allows for an inflated "cash price," which Section 16 then Doubles for the credit price, i.e., the Total of Payments.
The Unconscionable Choice: Fleece the poor with S.1343/A.1097:
Three unfair formulas in S.1343/A.1097 would permit Rent to Own to charge interest rates well over 100% APR:
Formula 1: If Cash Price were equal to fair market value, then that amount were doubled for the credit price, the MINIMUM interest rates will be:
(the first example assumes "no cheating" on price)
Total of Payments:
(Double the cash price, as per bill S.1343/A.1097)
Bill S1343/A1097 does not specify the length of the contract: any number of months would be allowed under this loophole! So conceivably the interest could be collected in 6 months, or less.
which allow the "Cash Price" to be padded artificially:
(competitive stores charge substantially less than MSRP),
then double the MSRP for the credit price
then Double phoney cash price for credit price
(This will be the one used, because it is the highest.)
Rent to own is a civil rights
The middle class can go to the mall and buy TVs, VCRs, which are marked up only 10-20%, and pay only 21% interest. So a $250 TV costs $250 cash, $291 on credit.
The poor go to rent to own in the inner city (you won't find any rent to own in Alpine or Bernardsville) and the goods are marked up 100% for the phoney cash price, then the inflated cash price is doubled again for the credit price. So the $250 TV can cost $960 to buy on credit at rent to own. The annual percentage rate in this example is 369% APR.
CLNJ thinks treating the poor this poorly is outright discrimination. Separate and unequal stores aimed at the urban poor, with quadruple the prices the middle class pay, have no place in America. Separate laws for the poor, with fewer consumer protections than the middle class enjoy, allowing the poor to be exploited at 369%, have no place in America.
Any poor person who can pay $53/month for that TV at rent to own is creditworthy enough to pay only $16/month at a department store. It is rent to own who treats the poor as second class citizens-- by these grievous overcharges, and by failure to disclose the high interest rates.
With "friends" like rent to own, the poor don't need any enemies.