Press Release  AG Campbell Reaches $7.8 Million Settlement With Lease-To-Own Company For Deceptive Practices That Cost Consumers Thousands

Boston — Massachusetts Attorney General Andrea Joy Campbell today announced a $7.8 million settlement with Texas-based financial technology company, American First Finance LLC (AFF), resolving allegations that the company used unfair and deceptive business practices to mislead consumers with expensive lease-to-own contracts. The settlement requires AFF to pay $2 million to the Commonwealth, which will be returned to impacted customers as restitution once it is paid, and provides nearly $5.8 million in credits to existing consumer accounts. 

“Consumers making significant purchases deserve to be presented with clear, straightforward payment options. When companies mislead buyers and profit off the confusion they create, that violates our consumer protection laws and unfairly puts our residents at risk,” said AG Campbell. “My office will continue to hold companies that take advantage of consumers accountable, especially when they target our most vulnerable communities.”  

AFF partners with brick-and-mortar retailers to provide point-of-sale lease-to-own contracts for goods such as auto parts, furniture, home appliances, electronics, and jewelry. AFF serves customers who may not be able to pay the full price of an item up front and who may not qualify for other payment solutions due to low income or poor credit.  

The lease-to-own contracts AFF offers allow customers to take products home immediately and make payments on the product over the course of months or years to eventually own the item. However, AFF placed unreasonable and unfair barriers to consumers exercising the “Early Buyout Option” (EBO), a feature of its contract that AFF advertises prominently, which allows consumer to obtain ownership of the merchandise after just 90 or 101 days, for a minimal fee above the cash price. The EBO is always significantly less than the total payment amount required to obtain ownership after the EBO period expires, which can be more than triple the cash price of the merchandise. The Attorney General’s Office (AGO) investigation found that AFF created artificial barriers that made it more difficult for consumers to exercise the much less expensive EBO.  

The investigation also found that AFF’s advertising did not consistently make it clear to consumers that they were entering into a lease agreement. According to the AGO, this conduct misled consumers about the terms and true cost of the agreement. Many AFF customers who contacted the AGO believed they were financing, not leasing, their merchandise and were shocked to find out how much it would cost them to obtain ownership. 

Today’s settlement agreement returns millions in restitution to thousands of consumers who paid far more than the retail price for their merchandise. Consumers receiving restitution under this settlement will be contacted in the coming months. It also requires AFF to correct its marketing practices to, among other things, make clear that it only offers lease-to-own products in Massachusetts, and not loans, protecting future consumers from being misled. The agreement ensures AFF’s compliance with other Massachusetts consumer protection laws and AGO debt collection regulations.  

This matter was handled by Assistant Attorneys General Adelaide Pagano and Ellen Peterson, and former paralegal Sarah Most, all of the AGO’s Consumer Protection Division, with assistance from Senior Investigator Anthony Crespi of the AGO’s Civil Investigations Division.  

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