Alaska joins 43-state, $183.5M settlement with rent-to-own finance company Acima

Acting Attorney General Cori Mills announced Friday that Alaska has joined a $183.5 million multistate settlement with rent-to-own finance company Acima Digital. Eligible Alaskans with Acima agreements will get about $10,500 in restitution and about $22,600 in lease forgiveness, and the state will receive $53,140.56, according to the Department of Law.

Eligible Alaskans do not need to file a claim or take any other action. A settlement administrator will contact people owed restitution, and Acima will contact those whose lease balances are forgiven.

Alaska joined 42 other states in the settlement with Acima Digital, LLC and its parent company, Acima Holdings, LLC. Acima works with retailers to offer customers financing through rental-purchase agreements. Nationally, the deal includes $43 million in restitution, $130 million in lease balance reductions and a $10.5 million payment to the states.

The states alleged Acima marketed its agreements as 90-day payoff programs without disclosing that customers were automatically placed in the maximum 12-month term, under which a customer could pay about twice the cash price the retailer advertised. The coalition also alleged Acima used terms like "credit" that often led customers to believe they were getting traditional financing. It said the company's electronic signing process obscured the terms of the deal and that Acima kept customers from ending agreements without penalty by returning the merchandise.

"Acima took advantage of folks who were just trying to make buying furniture and other big-ticket purchases a little easier," Mills said in a Friday release. "I'm pleased to join 42 other Attorneys General in demonstrating that there will be consequences for conducting business in this way."

Under a consent judgment, Acima cannot obscure terms during electronic signing, mark up the cash prices set by its retail partners or block customers from ending an agreement by returning merchandise. Certain advertising claims must come with clear disclosure of other material information. For five years, the company cannot report rental-purchase agreements to the three major credit reporting agencies.

The Acima deal follows another multistate consumer settlement this fall. In September, Mills joined 40 other states in a $709.5 million settlement with subprime auto lender Credit Acceptance Corporation, which resolved allegations of unfair and predatory lending.