| Abstract: | Rent‐to‐own enterprises represent a lucrative and rapidly growing industry. They are of particular concern to social service agencies, policy makers and consumers because they target a vulnerable, economically disadvantaged segment of the population. This article presents an investigation of a major player in the industry in one US state that fell under scrutiny by the courts because of a question of whether it is a retail enterprise covered by truth in lending legislation. Findings indicate that the average time price differentials charged by the largest retailer in this state exceed by more than three times the regulated 30% cap on interest rates. Rent‐to‐own is an example where regulation must be put into place so consumers can make more informed decisions. Such regulation, however, must be accompanied by financial literacy education that will further empower vulnerable consumers in the marketplace. |
