Rent-A-Center Lawsuits: State Actions, Class Suits, and Appeals

Rent-A-Center lawsuits span consumer protection settlements with state attorneys general, federal antitrust and consumer finance actions, class actions over pricing and discrimination, and two federal appellate decisions that carry the company’s name. Together they have cost Rent-A-Center and its affiliates well over $80 million in settlements, judgments, and restitution, and have reshaped how the company markets leases, collects on missed payments, and structures its arbitration agreements.

Massachusetts: $8.75 Million for Abusive Collection Practices

On November 28, 2023, Massachusetts Attorney General Andrea Joy Campbell announced an $8.75 million settlement resolving allegations against Rent-A-Center’s more than 40 Massachusetts stores. The Assurance of Discontinuance targeted what the state described as a pattern of misconduct aimed at low-income communities and communities of color.¹

The central allegation: Rent-A-Center had routinely filed applications for criminal theft and larceny complaints against customers who fell behind on rental payments, using the criminal justice system as a collection tool. The state said the company pursued criminal complaints even against consumers who had already made substantial payments over several years.¹

The investigation also found the company violated state debt collection rules by calling consumers’ homes, workplaces, and personal phones more than twice in a seven-day period, and that employees appeared unannounced at customers’ homes for repossession attempts, at times leading to physical confrontations.² The settlement barred future criminal filings against customers over missed payments and required an overhaul of collection and repossession practices.¹

California: $15.5 Million Judgment and Automatic Restitution

On August 2, 2022, California Attorney General Rob Bonta announced a $15.5 million stipulated judgment against Rent-A-Center, split between $13.5 million in consumer restitution and $2 million in civil penalties. The case targeted the company’s Preferred Lease business, formerly AcceptanceNOW, which operated through kiosks placed inside third-party retail stores.³

The attorney general alleged that since 2014, Rent-A-Center had executed more than 100,000 Preferred Lease agreements in violation of the Karnette Rental-Purchase Act and California’s Automatic Renewal Law. The heart of the complaint was a 15 percent markup: the “cash price” listed in lease contracts was inflated by 15 percent over what the retailer actually charged, meaning customers who thought they were paying sticker were quietly paying more. The state also alleged the company misled consumers about their right to return merchandise without penalty and enrolled customers in a “Benefits Plus” subscription without proper consent or clear cancellation disclosures.³

Consumers who leased items through Preferred Lease, RAC Acceptance, or AcceptanceNOW kiosks in California between January 18, 2014, and August 9, 2022, and whose contracts contained the markup were eligible for automatic restitution. No claim form was required.⁴ Payments began in September 2023, with amounts tied to the total paid under each qualifying contract.⁵ The settlement also required Rent-A-Center to stop inflating cash prices, provide a “Know Your Rights” document, and submit annual compliance reports for three years.³

Washington and Georgia Enforcement

Washington’s attorney general sued Rent-A-Center in July 2009 over aggressive collection tactics, including cursing at customers, pounding on doors, peering through windows, and threatening arrest. In one instance cited by the state, company employees told an 11-year-old girl that her mother “could be jailed for theft.”⁶

A 2010 consent decree in King County Superior Court capped account contacts at six per week, prohibited trespassing, barred contact with a customer’s workplace after being told to stop, and required disclosure of cash prices in lease-purchase agreements. Rent-A-Center paid $243,000 in attorneys’ fees and $100,000 to fund monitoring, without admitting wrongdoing.⁶

In February 2022, Georgia Attorney General Chris Carr announced a settlement over allegations that Rent-A-Center made repeated harassing phone calls, threatened customers with criminal prosecution, marketed loss damage waivers as “insurance” or “warranty programs,” and continued charging for club memberships after rental agreements had ended. Rent-A-Center paid $145,590 in civil penalties, with an additional $170,910 owed if it violated the agreement within two years. The company did not admit to the allegations.⁷

FTC Antitrust Consent Order Over Store Swaps

In February 2020, the Federal Trade Commission charged Rent-A-Center, Aaron’s, and Buddy’s Newco with violating federal antitrust law through reciprocal purchase agreements. Between June 2015 and May 2018, the three companies traded customer contracts and closed stores in each other’s local markets, with noncompete clauses typically barring the exiting company from reopening nearby for three years. The FTC found these arrangements cut consumer choice and forced customers to travel farther to make in-person payments.⁸

Consent orders finalized in May 2020 prohibit future reciprocal purchase agreements, void the noncompete clauses from past swaps, require antitrust compliance programs, and remain in effect for 20 years. Each violation carries a civil penalty of up to $43,280.⁹¹⁰

Class Actions

Blair v. Rent-A-Center: $13 Million Over Freight Surcharges

In Blair v. Rent-A-Center, filed in the U.S. District Court for the Northern District of California, consumers alleged that Rent-A-Center improperly added a $23 freight surcharge to appliances and household items shipped to stores by its subsidiary, National Product Services, in violation of California’s Karnette Act. The court approved a $13 million settlement on January 24, 2020, covering more than 100,000 California consumers. Rent-A-Center also paid $3.9 million in attorneys’ fees and over $200,000 in costs.¹¹¹²

$47 Million Sex Discrimination Settlement

Rent-A-Center settled a class action sex discrimination lawsuit for $47 million on behalf of more than 5,000 women. The Equal Employment Opportunity Commission had found that 98 percent of the company’s employees were men. Witnesses testified that former CEO J. Ernest Talley and other executives made openly discriminatory statements, including “The day I hire a woman will be a cold day in hell” and “Get rid of women any way you can.” Talley left after the lawsuits were filed, and Rent-A-Center agreed to recruit women for its board and increase the number of female employees.¹³

The CFPB Case Against Acima Was Dismissed

On July 26, 2024, the Consumer Financial Protection Bureau sued Acima Holdings, Acima Digital, and Acima co-founder and former CEO Aaron Allred in the U.S. District Court for the District of Utah. Acima is a lease-to-own company acquired in 2021 by Upbound Group, the corporate parent of Rent-A-Center.¹⁴

The CFPB alleged that Acima used dark patterns in its mobile app to obscure contract terms, marketed its products as credit while labeling them as leases to sidestep financial protection laws, and designed a returns process so difficult that fewer than one percent of consumers successfully returned goods. The agency also accused Acima of deceptively marketing a 90-day “early purchase option” as an interest-free loan when it actually cost more than the retail price of the goods.¹⁵

On March 6, 2025, the CFPB voluntarily dismissed the lawsuit with prejudice. Acima paid nothing, changed no business practices, and complied with no form of relief. In exchange, Acima dropped its own lawsuit against the CFPB, filed in the Eastern District of Texas, which had challenged the agency’s authority to bring the claims.¹⁶¹⁷

Two Federal Appellate Decisions Bear Rent-A-Center’s Name

Rent-A-Center, West, Inc. v. Jackson (Supreme Court, 2010)

Antonio Jackson signed a mandatory arbitration agreement as a condition of employment and later sued Rent-A-Center in federal court in Nevada for employment discrimination, arguing the entire arbitration agreement was unconscionable. The agreement contained a “delegation provision” giving the arbitrator exclusive authority to decide disputes about the agreement’s enforceability.¹⁸

In a 5–4 decision written by Justice Scalia, the Supreme Court held that under the Federal Arbitration Act, a court can only address a challenge directed specifically at the delegation clause. Because Jackson had challenged the agreement as a whole rather than that clause, the arbitrator, not a judge, had to decide whether the agreement was unconscionable. Justices Stevens, Ginsburg, Breyer, and Sotomayor dissented, with Justice Breyer describing the outcome as a “Russian nesting dolls” problem that lets companies shield arbitration agreements from judicial review by nesting delegation clauses inside them.¹⁹²⁰

Karraker v. Rent-A-Center (Seventh Circuit, 2005)

In Karraker v. Rent-A-Center, Inc., 411 F.3d 831 (7th Cir. 2005), current and former employees challenged Rent-A-Center’s use of the Minnesota Multiphasic Personality Inventory as a screening tool for management promotions. The Seventh Circuit reversed the district court’s dismissal, holding that because the MMPI is designed in part to identify mental impairments, administering it to employees was a prohibited medical examination under the Americans with Disabilities Act, regardless of the employer’s intent. On remand, the district court ordered Rent-A-Center to destroy all test scores and narratives from its Illinois facilities and stop considering them in employment decisions. Plaintiffs were awarded $155,328.85 in attorneys’ fees and costs, and the lead ADA plaintiff received $5,000.²¹

Why the Legal Trouble Keeps Recurring

Much of Rent-A-Center’s legal exposure grows out of the structure of rent-to-own itself. A customer makes low down payments and periodic payments over one to two years; complete the schedule and the customer owns the item, miss payments and the store reclaims it while prior payments are forfeited. Consumer advocates note that “cash prices” at rent-to-own stores are often 1.5 to 2.5 times higher than comparable retail prices, and total cost to ownership can reach 4.5 times retail.²²

No comprehensive federal law governs rent-to-own transactions. Regulation falls mostly to states, whose disclosure requirements and price caps vary. A New York City investigation of the newer “virtual” lease-to-own model, where a third-party company buys merchandise from a retailer and leases it to the consumer, found consumers paying more than double retail price and effective annual rates above 100 percent, with some retailers rushing applications, failing to disclose key terms, or mischaracterizing leasing charges as “interest.”²³ Those pricing structures, and the collection efforts that follow when customers cannot keep up, are the recurring source material for the actions above.

1
Mass.gov. AG Campbell Announces $8.75 Million Settlement With Rent-A-Center
2
Boston Globe. Rent-A-Center to Pay More Than $8 Million to Settle Claims of Abusive Conduct Toward Poor Consumers
3
California Attorney General. Attorney General Bonta Announces $15.5 Million Judgment Against Rent-A-Center
4
California Rent-A-Center Settlement. Frequently Asked Questions
5
California Rent-A-Center Settlement. California Rent-A-Center Settlement
6
Washington Attorney General. Rent-A-Center Settles Harassment and Contract Claims
7
Georgia Consumer Protection Division. Carr Announces Settlement With Rent-A-Center
8
Federal Trade Commission. Rent-to-Own Operators Settle Charges They Restrained Competition Through Reciprocal Purchase Agreements
9
Federal Trade Commission. Rent-A-Center, Inc., In the Matter Of
10
Federal Register. Rent-to-Own Store Swaps: Analysis of Agreement Containing Consent Order to Aid Public Comment
11
Altshuler Berzon LLP. Court Approves $13 Million Consumer Class Action Settlement in Blair v. Rent-A-Center
12
Bloomberg Law. Rent-A-Center Settles Overcharging Claims for $13 Million
13
Feminist Majority Foundation. Rent-A-Center Settles Sex Discrimination Lawsuit
14
Consumer Financial Protection Bureau. Acima, Allred
15
CCH. CFPB Sues Rent-A-Center Affiliate Acima and Founder Aaron Allred for Illegal Lending Practices
16
Upbound Group. Upbound Group’s Acima Leasing Announces CFPB’s Voluntary Dismissal
17
SEC. Upbound Group Press Release
18
Cornell Law Institute. Rent-A-Center, West, Inc. v. Jackson
19
Justia. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63
20
SCOTUSblog. Rent-A-Center v. Jackson: Delegating to Arbitrator Power to Determine Arbitrability
21
Civil Rights Litigation Clearinghouse. Karraker v. Rent-A-Center, Inc.
22
Consumer Federation of America. Rent-to-Own Policy Brief
23
New York City Department of Consumer and Worker Protection. Lease-To-Own Report