Massachusetts consumers will receive $830,000 in restitution and $10.7 million in forgiveness of lease-to-own accounts under a $183.5 million multistate settlement with Acima Digital, LLC, Attorney General Andrea Joy Campbell announced Nov. 12. The Commonwealth will also receive a $163,000 payment.

Campbell joined 42 other attorneys general in the agreement with Acima Digital and its direct parent, Acima Holdings, LLC. According to the attorney general's announcement, the total consists of $43 million in restitution for consumers, a $10.5 million payment to the states and $130 million in lease balance reductions.

What the states alleged

The attorneys general alleged that Acima deceptively advertised its rental-purchase agreements and incorrectly marked up the prices of merchandise being rented. They said Acima marketed the agreements as 90-day payoff programs without disclosing that customers were automatically defaulted into the maximum 12-month term, in which they could pay approximately twice the cash price advertised by Acima's retail partners.

The states also alleged that Acima used terms such as "credit" that often misled consumers into believing they were getting traditional financing, that its electronic signing process obscured the terms of the transaction, and that it obstructed customers who tried to end an agreement without penalty by returning the merchandise. The attorney general's release does not include a response from Acima. In its own announcement, the company said the settlement "does not include findings or admissions of wrongdoing."

What Acima agreed to do

Under the settlement, Acima agreed to:

  • train its retail partners;

  • refrain from certain advertising representations unless other material information is clearly and conspicuously disclosed;

  • refrain from obscuring material terms during electronic signing;

  • refrain from marking up the cash price from that of its retail partners;

  • refrain from obstructing returns that end an agreement; and

  • refrain from reporting rental-purchase agreements to the three major credit reporting agencies for five years.

Acima also agreed to properly handle late deliveries, merchandise damaged at delivery and its legal obligation to make repairs during a lease.

What eligible customers should expect

Eligible consumers do not need to take any action at this time, according to the attorney general. Those eligible for restitution will later be contacted by the settlement administrator to file a claim, and those eligible for lease forgiveness will be contacted by Acima. The release does not say how many Massachusetts customers are covered or when contact will begin. Acima's announcement describes the $130 million in lease forgiveness as covering charged-off accounts of certain customers who kept leased merchandise after default.

"At a time when many families are struggling with the high cost of living, my office will continue to put money back into consumers' pockets and hold corporations accountable for unlawful conduct," Campbell said.

The attorney general's office pointed to a May settlement with American First Finance, LLC, a Texas-based financial technology company, over lease-to-own contracts. That agreement required the company to pay $2 million to the Commonwealth to be returned to customers as restitution and provided nearly $5.8 million in credits to existing accounts.

Assistant Attorney General Adelaide Pagano of the office's Consumer Protection Division handled the Massachusetts matter. Connecticut, Maine, New Hampshire, Rhode Island and Vermont attorneys general also joined the settlement.