A rent-to-own is a dangerous place to spoil oneself, Ron Young discovered.
By last fall, Young had stocked his East Side apartment with furniture and electronics from the Rent-Way at Glenville Town Center. First he brought home a television set and a DVD player. The Rent-Way truck delivered a sectional couch next, then a bedroom set.
Young, 62, worked two jobs at the time of his splurge. "I'm an older person, and I just wanted some nice stuff," he says.
But two jobs became one, and now Young doesn't work at all because of complications from diabetes. (His principal employment was as the head of maintenance at a Bed Bath & Beyond branch.) When he began to miss payments -- which topped $300 every two weeks -- Rent-Way demanded restitution.
"They called me at all hours of the morning and night," Young says. "They called me at my job. They were very nasty. They came to the apartment building looking for me, listening at people's doors to see if I was in the building. There were times I would come home, they would be sitting in the lobby. The manager had to ask several times what was the problem. They were really obnoxious."
Rent-to-owns are infamous for aggressive collection practices. Store agents have been known to report bogus disturbances and to dress up as trick-or-treaters on Halloween in order to gain entry into the homes of delinquent renters. A California store manager once enlisted the help of some Hell's Angels.
Young felt a special pressure to comply with Rent-Way's orders. One notice he received threatened criminal prosecution. Citing a section of the Revised Code, the notice warned in large capital letters that failure to "return the rental property after it's been demamnded [sic]" might result in a felony theft charge.
More interesting than the playground spelling is the inscription at the bottom. The notice bears the name, address, and phone number of the Cleveland Police Department. There is also a replica of a badge and a name: "Detective W. Thomas #1874."
Walter Thomas, badge No. 1874, works in the Cleveland Police Department's narcotics unit. But the detective says that he did not lend his rank and shield to the rent-to-own. Rather, he says, he was a customer.
Thomas says he rented a TV from the same Rent-Way in Glenville. He guesses that he unwittingly gave a store agent the means to create a likeness of police stationery. "I came back in to make a payment on my TV, and they were like 'Hey, can we have a business card?' I was like 'Sure.' I give everyone my business card."
Thomas says he had heard once before that his authority was being used to smoke out Rent-Way debtors. "I went and talked to them about it," he says. "They said that whoever did it had been fired."
But an attorney who represents Young accuses Thomas of willingly lending his officer cred. A lawsuit filed by Ed Icove states that Thomas "was/is a part-time employee of Rent-Way." The suit argues that the threat of arrest is a deceptive sales practice. Icove hopes to represent Young and others in a class-action lawsuit against Rent-Way and Thomas.
At this point, Rent-Way is pleading ignorance. Staff attorney Greg Ochocki says he was "shocked" when he saw the threat contained in the lawsuit. "We don't use the police to track down our customers," he says.
Ochocki provided a copy of a Rent-Way procedure manual that prohibits the use of badges, uniforms, and letterheads to imply greater authority. The manual also notes that, under the law, mere failure to return rent-to-own property does not constitute probable cause for criminal charges.
Ochocki says the W. Thomas letter was being investigated. An attorney in the office of County Prosecutor Bill Mason did not see a crime in the letter, according to spokeswoman Kim Kowalski. The Cleveland Police Department failed to respond to requests to discuss the use of its name by commercial entities.
Ochocki says Rent-Way's payroll records do not show a Walter Thomas, but it does seem odd that a detective making an annual salary near $50,000 would shop at a rent-to-own. The industry targets the bedraggled. Stores settle in struggling neighborhoods. Less than half of rent-to-own customers hold a credit card, according to a Federal Trade Commission survey. More than a third lack a checking account.
Disadvantage and desperation allow rent-to-owns to exact brutal terms. Young, for instance, agreed to rent a used bedroom set the store listed at a cash price of $1,739.40. The deal called for Young to pay $57.98 (before taxes) every two weeks. He would have taken ownership of the set after 50 payments. But by then, Young would have paid $2,899, or 167 percent of the already inflated cash price.
Rent-Way was under no obligation to disclose to Young that he was paying an effective annual interest rate of nearly 35 percent. In most states, rent-to-own agreements are considered leases, not loans. Stores are exempt from lending laws, even though 70 percent of merchandise is eventually purchased, according to the FTC survey. "Basically, you've got an industry that preys on the poor and is virtually unregulated in 45 states, including Ohio," says Edmund Mierzwinski of the U.S. Public Interest Research Group.
Young says that, in all, he paid Rent-Way more than $7,000. He was under the impression that an insurance policy protected his goodies in the event of sudden illness or unemployment. Young says he spoke with a store manager when he learned he was about to lose his job. "He told me the insurance would fall in and take over until I got back to work," Young says. "And then, when I spoke with him again, he said no." (Ochocki says Rent-Way offers no such insurance.)
When Young didn't return the goods, he received the threatening letter. "I was very afraid, quite upset, humiliated. You have no idea how I felt. I'm a sixtysomething-year-old man, and for them to come to me like this, after I had been making my payments, I didn't understand it."
Eventually, Rent-Way reclaimed a curio cabinet, dinette set, two end tables, and the TV. Young wasn't likely to hold onto the merchandise, in any case. "I wanted better stuff," he says. "Just like getting a Cadillac. You see a new Cadillac, you want a better Cadillac."