A $13 million settlement has been reached between Rent-A-Center customers and the rent-to-own retailer ending claims that it unfairly adds on freight charges.
Under the terms of the proposed settlement, Rent-A-Center will provide between $100 and $1,000 to close to 100,000 Class Members.
The amount each person receives will be based on 25 percent of the total value of each transaction.
The Rent-A-Center settlement deal was reached after two years of contested litigation, including a motion to compel arbitration, summary judgment motions, and mediation. The settlement itself is the result of two settlement conferences with Chief Magistrate Judge Joseph C. Spero, according to the customers.
Class Members include everyone in California who made a rental-purchase agreement with Rent-A-Center since March 13, 2013. Around 30,000 known Class Members have been identified, but the total number of Class Members is unknown because Rent-A-Center allegedly does not track items by serial number. The customers estimate this number to be around 77,000 additional, unknown customers, however.
Any unclaimed settlement funds would go to a cy pres award and would be donated to charities.
The Rent-A-Center class action settlement also includes some requirements in addition to a settlement fund and monetary benefits for Class Members. Per the terms of the proposed settlement agreement, Rent-A-Center would also ensure that their freight charges are not above what is allowed under California law.
Additionally, Rent-A-Center would revise its arbitration agreement, which would enable some California customers to seek public injunctive relief.
Customers who filed the freight charge class action lawsuit against Rent-A-Center Inc. and Rent-A-Center West Inc. say that the companies violated the Karnette Rental-Purchase Act, which sets a cap on the amount that rent-to-own companies can charge for any particular item.
Customers had also claimed that Rent-A-Center forbids customers from seeking public injunctive relief per a policy, which is allegedly unenforceable by California law.
Rent-A-Center reportedly charged freight charges so high that the total price for an item exceeded the legal limit.
Customers expressed approval of the settlement deal, saying that the proposed benefits would give Class Members “nearly 100 cents on the dollar on their Karnette Act claims” as well as providing injunctive relief.
The $13 million deal awaits approval. Rent-A-Center does not admit any wrongdoing in the matter, but customers and the company have agreed to settle the matter to avoid the risks and costs of continuing litigation.Are you a Rent-A-Center customer? Let us know what you think of this proposed settlement in the comment section below.
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Rent-A-Center customers are represented by James T. Hannink and Zach P. Dostart of Dostart Hannink & Coveney LLP, and Michael Rubin and Andrew Kushner of Altshuler Berzon LLP.
The Rent-A-Center Freight Charges Class Action Lawsuit is Blair, et al. v. Rent-A-Center Inc., et al., Case No. 3:17-cv-02335, in the U.S. District Court for the Northern District of California.
