Rent-To-Own Companies And Theft By Deception: Understand Your Risk!

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Rent-To-Own Companies And Theft By Deception: Understand Your Risk!

5 October 2015
 Categories: , Blog

Have you defaulted on the payments of a rent-to-own contract or an in-store credit purchase? If so, you can end up being charged with "theft by deception" unless you take steps to return the items to the store.

What is theft by deception?

Theft by deception occurs when you use trickery or misrepresentation in order to gain access to someone else's property and deprive them of it. The crime can either be a misdemeanor or a felony, usually depending on state laws and the value of the items involved.

In Ohio, for example, if the theft involves items worth more than $1000, the crime is a felony. The minimal penalty could be 6 months in jail and a fine of up to $2,500!

How does this involve rent-to-own stores and places with in-store credit?

Rent-to-own businesses typically market their products to people who don't have the money or credit to buy appliances, televisions, or other home furnishing items. You get to take the items home right away, often for a minimal down payment, then pay them off over a period of weeks, months, or years.

In-store credit is similar. Usually offered by smaller businesses, like independent jewelry stores or family hardware stores, in-store credit appeals to people who have poor credit histories because the small stores typically allow easier access to credit in order to remain competitive with larger "big box" companies. These small companies often finance you directly, rather than through a third party (like a bank).

When the store agrees to let you take its merchandise with you, you sign a contract promising to make regular payments on the merchandise. Failing that, the contract usually requires that you return the items to the store with minimal wear-and-tear.

How can a simple default on payments result in criminal charges?

People often default on credit card payments without getting charged with a crime, so why is this situation different? It's usually because the terms of the contract make it clear that you are merely "renting" the item until it is paid off, and that ownership of the item still belongs to the company.

With a credit card purchase, you aren't making an agreement directly with the store in exchange for the goods you take. Your credit card company has taken the gamble (based on your credit history) that you'll pay off your debt, so the credit card company pays off items at the time of purchase -- which transfers ownership of those items directly to you.

If you get into financial trouble later on and default on your credit card payments, there are other potential legal problems (like the possibility of bankruptcy or fraud charges), but your ownership of the items you bought on the credit card isn't a question.

What can you do to resolve the problem if you can't pay the debt?

First, examine your contract with the rent-to-own company or the in-store credit purchase. It will often spell out the procedure to return the items. To avoid a theft by deception charge, make every effort to return the items as soon as possible.

What if you can't return the items you took for some reason?

If you bought a couch on rent-to-own that's been chewed up by the dog or bought a diamond necklace on in-store credit that you gave away as a gift, you obviously can't return the item. If you can't pay for it right now, try to negotiate with the store for an extension, or smaller payments, until you can get back on your financial feet.

If the store persists in pressing charges, you need to contact a criminal defense attorney to help you. Your best defense is to try to establish that you had no intention to deceive or steal the property. Proof that you at least made some of the required payments and that your failure to continue to pay was due to a lack of funds (rather than willfulness) can help your defense.

For more information, contact The Law Office of James W. Winslow, P.C. or a similar firm.