“A Rent-to-own Nightmare”

Texas Tribune  
October 27, 2017


Most people who rent a loveseat or a big-screen TV don’t imagine that the contract they sign could land them in jail. But a little-known Texas law written by lobbyists for the rent-to-own industry has quietly allowed rental businesses to file criminal charges against consumers. That gives them a special tool not available to other companies, which must use civil remedies when customers don’t pay their debts. The Texas Tribune’s months-long investigation with the personal finance website NerdWallet found that rent-to-own companies have pressed charges against thousands of unassuming customers in Texas and across the country — upending their lives and in some cases putting them behind bars.

This story was a unique collaboration that began when Tribune reporter Jay Root met NerdWallet reporter Brad Wolverton at an Investigative Reporters and Editors conference. Wolverton had received a tip, and Jay knew Texas was home to one of the largest rent-to-own companies in the country. Back in Texas, Root and Texas Tribune fellow Shannon Najmabadi got to work digging into the state’s criminal statutes.

The investigation quickly turned complex. Rent-to-own customers, who often live paycheck to paycheck, change addresses and phone numbers frequently. That made it difficult to locate victims. Finding information about criminal charges was also a thorny process. Local governments tried to charge us ridiculous sums of money for their records. And many weren’t able to tell us how many “theft of service” cases in their jurisdictions involved rent-to-own businesses. That meant we had to make hundreds of phone calls to drill down into the data.

Other news organizations have previously reported on some limited aspects of the rent-to-own industry. But our reporting uncovered how a decades-old law written by a rental industry lobbyist came to be used to give special powers to an industry that hardly existed at the time of that law’s creation: the rent-to-own business. Further, our in-depth interviews with victims — featured in a print story, in a related video and in a social media Tweetstorm — illuminated the human impact of allowing rent-to-own companies to prosecute their customers.

Dozens of Texas newspapers and TV stations picked up our story and ran with it, blasting it across front pages and nightly newscasts.

As a result of our investigation, Texas lawmakers from both sides of the political aisle pledged that when they meet next in 2019, they will pass legislative reforms to criminal laws that allow rent-to-own companies to pursue felony theft charges. (We’ll be watching closely to ensure they follow through.)

In Waco, where rent-to-own companies have pressed charges against hundreds of customers in the past few years, a city council member has demanded a city review of the practice.

And the Texas Tribune also contributed to a related NerdWallet story that prompted a federal investigation into the rent-to-own industry.

We are confident the investigation has also had another kind of impact: arming potential rent-to-own customers with the knowledge that they could face danger when they sign a contract. We think this project is worthy of your consideration.

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Submitted by Emily Ramshaw.

Headliners Foundation