With inflation taking a big bite out of budgets and holiday shopping bills coming soon, what can consumers do if they need an appliance?
The easy solution may be renting, but one woman found out it can be a very expensive proposition.
After her old washer and dryer broke, Nicole Broomfield decided to go the rent-to-own route. She brought home a new Kenmore set.
"It should have been $1,792 and some change," she said the salesman told her.
That's what she thought she would be paying for her one-year rental — until the company sent her a letter at the end of the year.
Broomfield quickly learned she had been charged "a little over $6,000, close to $7,000," she said.
It turned out she had paid almost $7,000 for a basic, white, top-loading washer that retailed for $800 online, and a plain white dryer that should have cost $700.
Broomfield insists she was only told about the reasonable weekly payments and never read the fine print because there was no paperwork.
The store only showed her a digital contract to sign on her phone.
Renters stunned by high bills
The Better Business Bureau (BBB) receives hundreds of complaints a year from consumers stunned by high rent-to-own bills. The organization warns that once a customer signs, there's often no way out.
"Legally, not much can be done when you sign the contract," said Sara Kemerer of the BBB.
Kemerer says to beware of low introductory rates and find out the total payment over the course of that rental period.
"A lot of people take their finances week by week, so they are enticed by that great starting low-interest rates, and then it only skyrockets and increases," Kemerer said.
NerdWallet.com put it into perspective. They report that a $450 HD TV paid with a credit card carries $90 interest over 22 months, which is reasonable. However, they said that the same TV at a rent-to-own store with a one-year, $20 a week rental puts the price tag of over at $1,000 — nearly $600 over the cash price.
Rent-to-own contracts are not the only thing that consumers need to look out for. The Federal Trade Commission says zero-interest buys are also a big deal around the holidays.
Those can work out fine as long as a customer pays off the entire bill before the end of the term. But if they go just one day past due, they could be on the hook for all the interest that was supposed to be saved.
Depending on what the person bought, it could be hundreds of dollars.
So read the contract before you buy, so you don't waste your money.
__________________________
Don't Waste Your Money" is a registered trademark of Scripps Media, Inc. ("Scripps").
Like" John Matarese Money on Facebook
Follow John on Instagram @johnmataresemoney
Follow John on Twitter (@JohnMatarese)
For more consumer news and money saving advice, go to www.dontwasteyourmoney.com
