News Release


Bruce Speight,

Survey Finds Astronomical Rent-to-Own Prices, Interest Rates

Predatory Industry Seeks Special Interest Exemption from Wisconsin Consumer Law
For Immediate Release

Madison – A report released today found that five rent-to-own stores in Rockford, IL on average charged an annual percentage rate of 221% and displayed outright cash purchase prices as much as two to seven times the cost of the same or similar products at other major retailers. The legislature is currently debating a controversial proposal in the executive budget proposal to provide a special exemption from the Wisconsin Consumer Act for the rent to own industry and which would eliminate the requirement to disclose an APR for Rent-to-Own products sold in Wisconsin. 

“Rent-to-own is a rip-off,” said Bruce Speight, WISPIRG Director.  “The industry preys on low-income and military families, deceptively markets its products, and seeks special treatment from state legislatures in order to make its business model work.  State leaders should not be carving out a special interest exemption for a predatory industry that traps consumers in a cycle of high-cost, perpetual debt.”

“The Republican Party is the party of compassion and we cannot let our party at the pinnacle of our power make exceptions in Wisconsin’s consumer act to help the Rent-a-Center chain of Plano, TX, come in here and fleece our most vulnerable citizens,” said Glenn Grothman, State Senator.

The rent-to-own industry is seeking an exemption from Wisconsin’s consumer protection laws, including a requirement to disclose interest rates, through the budget process - a sneaky, backdoor way to advance policy with less scrutiny.  Governor Walker has granted that exemption in his executive budget proposal that the legislature is currently debating.  The industry argues that its products should not be regulated as a credit transaction, which would eliminate numerous consumer protections, including the disclosure of interest rates even though rent-to-own products have been held to be a credit transaction by the Wisconsin Court of Appeals. 

“Rent-to-own walks like a credit transaction and talks like a credit transaction and has been deemed a credit transaction by the Wisconsin Court of Appeals, so it is a credit transaction and should be regulated as such,” continued Speight.  “The Bears and the Vikings have to play by the same rules as the Packers when they come to Lambeau Field; likewise, out-of-state rent-to-own companies should have to play by the same rules as other credit businesses in Wisconsin.  Unfortunately, Gov. Walker and some state lawmakers are proposing that we exempt rent-to-own from our state’s consumer protection laws and let them play by a different set of rules.”

The new WISPIRG report, The Rent-to-Own Ripoff, compares 11 common appliances found in March 2013 at five rent-to-own stores in Rockford, IL to the same or similar models, if the same model wasn’t available, at other major retailers.  The report found that:
•    The RTO stores that we surveyed charge an average effective APR of 221 percent, ranging from 138 percent to 370 percent for the appliances that we surveyed, which included televisions, refrigerators, laptops, oven ranges, and washers and dryers,
•    Purchasing items via rent-to-own costs between 2 and 7 times as much as purchasing the same items at major appliance and electronics retailers,
•    100 percent of the RTO stores surveyed, and 100% of the products surveyed in those stores, charged effective APRs of over 100 percent – that’s over five times prevailing credit card rates of less than 20%,
•    "Cash prices" at RTO stores for outright purchase are in most cases 50%-100% above the price of these products at major appliance and electronics retailers such as Best Buy, Walmart, and Menards,
•    Using a slightly above average cost 18% APR bank credit card, and financing their purchase over an equivalent period to a rent-to-own contract, or 18-24 months, consumers typically would pay only half and sometimes as little as a third of what they would pay by renting to own the same product.

“Rent-to-own promises consumers the American dream of ownership, but hides the fact that as many as 30% of RTO consumers never end up owning the product, and masks its inflated prices in weekly or monthly installment payments, hiding the true cost and effective interest rate of the product,” continued Speight. 

On April 26, numerous faith leaders, including Catholic Archbishop Jerome Listecki, Lutheran Bishop Paul Barrow and Interfaith Conference of Greater Milwaukee Executive Director Tom Heinen joined with legislative and community leaders in calling on the state legislature to remove this special interest exemption for the Rent-to-own industry.

“There should be no misunderstanding about this rent-to-own provision in the budget bill – it is not designed to protect or help consumers, instead it is designed to help the predatory rent-to-own industry” concluded Speight.  “Our state legislators should join with Senator Grothman and the other Republican and Democratic legislators who oppose this and reject special treatment for the rent-to-own industry.”


WISPIRG is a statewide non-profit, non-partisan consumer advocacy organization that stands up to powerful interest.

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