The Consumer Financial Protection Bureau (CFPB) has filed suit against lease-to-own finance company Snap Finance, alleging the business deceived consumers, obscured financing agreement terms and made false threats.
“Snap Finance illegally obscured terms and conditions of their so-called ‘rental purchase agreements,’ which led to exorbitant charges,” CFPB Director Rohit Chopra said. “To ensure fair competition and to protect the public, the CFPB is carefully watching lending outfits operating outside of the traditional banking system.”
Within the lawsuit filed in federal district court, officials noted the CFPB alleges Snap Finance has offered and provided millions of lease-purchase and rental-purchase financing agreements in ways that have harmed consumers, including via misleading advertisements, insufficient disclosures, and interfering with consumers’ ability to understand the terms and conditions of its financing agreements.
The CFPB additionally alleges Snap Finance’s illegal conduct continued in its servicing of the agreements, including misrepresenting consumers’ payment obligations.
The CFPB alleges Snap used deceptive advertising practices to lock consumers into expensive agreements; obscured the terms and conditions of its financing agreement to confuse consumers about their payment obligations; misrepresented consumers’ rights in the finance agreements; and made false threats and deceptive statements to struggling borrowers.