BELL COUNTY, TX — A new law aims to better protect consumers entering in to rent-to-own contracts for furniture and other household goods. Governor Greg Abbott signed a bill that would prevent Texans who renege on the agreements from being arrested or criminally prosecuted.
“The legislature was trying to tighten up a loophole or eliminate some opportunities for prosecutors to file criminal charges against individuals for failure to pay,” said Attorney Melissa Tyroch, of Tyroch Boyd PLLC.
But this isn’t applicable in every scenario. Consumers may still be charged if they had ill-intent in purchasing the item.
“I like to compare a scenario with a rent-to-own company with a credit card. If you fail to pay your credit card or your car note, no one’s knocking on your door arresting you and taking you to jail,” said Tyroch.
We talked to Rent-A-Center, a leading brand in the lease-to-own industry, about the Theft of Service statute, which allows prosecution even when a customer returns merchandise if they didn’t pay their bills.
“Each customer pays in advance for a period of use and can return a product anytime without the obligations a credit sale would impose. The Theft of Service statute permitted prosecution even when a customer returns merchandise if they didn’t pay rent due from the time the agreement expired until the product is returned. Rent-A-Center never used the statute in that way and only filed charges when a customer refused to return the product and evidenced an intent to steal,” said Matt Grynwald, Rent-A-Center, Inc.
Grynwald said the issue came to light after another Central Texas dealer was aggressively filing charges.
“As an industry leader, we thought it was important to work with Senator Miles and Representatives Anderson and Collier to improve the law. We feel that the result is a law that will clarify that prosecution is not appropriate for those who simply owe money, while still addressing those who enter an agreement with bad intentions, and recognizing that the merchandise is rental property that must be returned if the agreement expires,” said Grynwald.
Tyroch says the new law could alleviate the burdens put on our state and judicial system.
“Consumers will be protected when they enter into a contract like that. The state will no longer be a debt collector under certain agreements that truly are civil and not criminal,” said Tyroch.
Central Texas News Now also reached out to Aaron’s Inc., another popular rent-to-own retailer.
“Although many states have specific statutes making it a crime to keep and fail to pay for rented merchandise, Aaron’s does not pursue criminal charges against its customers for theft of service. This policy applies to company-owned stores, as well as those operated by our franchisees. We adopted this policy because Aaron’s is committed to working with customers when difficult and sometimes life-changing events prevent them from being able to make their lease payments. Even when customers fail to meet the terms of their lease-to-own agreements, and do not return the leased merchandise, our policy is to make every effort to work with them to resolve the situation amicably,” said Michael P. Dickerson of Aaron’s Inc.
The law goes into effect in September.