Rachel Konieczny//September 14, 2023
//September 14, 2023
A leasing company must pay $35 million in total to 41 states, including Maryland, after a multistate investigation found the company misled consumers.
Maryland will receive $1 million from Tempoe LLC, a specialty consumer finance company, for misleading consumers to believe they were agreeing to make a purchase through an installment plan or credit sale when, in reality, they were entering into a lease agreement. This resulted in consumers paying two to three times the purchase price of the product or service, the Office of the Maryland Attorney General said in a press release on Tuesday.
The Maryland Consumer Protection Division will receive $15,000 from the settlement payment to be used for consumer protection purposes at the sole discretion of Attorney General Anthony Brown. A spokesperson for the Maryland Attorney General’s office said this payment could be used for consumer protection enforcement and education, and to help defray costs associated with the settlement, but was unable to offer more specific information at this time.
The settlement also directs Tempoe to pay $1 million to the Consumer Financial Protection Bureau, which agreed to a parallel settlement resolving the same alleged conduct.
Since 2015 and until April of last year, Tempoe purchased personal property and services from retail partners and leased those properties and services to consumers nationwide, according to the settlement. During this time, Tempoe entered into nearly 1.85 million lease contracts with consumers.
The settlement specifies that Tempoe close each lessee account that it owns or controls, regardless of whether the accounts are in default. Consumers will not be required to make any further payments to Tempoe, and consumers’ credit scores will not be affected.
According to the settlement, Tempoe had 19,300 lease contracts with aggregate remaining balances totaling nearly $34 million.
Consumers with existing leases do not need to take any action as Tempoe has automatically cancelled their account(s) as a result of this settlement, according to the press release.
“We hope this settlement provides some financial relief to affected consumers,” a spokesperson for the Maryland Attorney General’s office said. “We also hope to encourage consumers who use third-party financing companies to pay for a product or service to read all the fine print in the agreement they are signing, including its terms and conditions, so they are fully aware of their obligations, but also of their rights.”
Tempoe recently shut down its operations, and its website is no longer in operation. The phone number listed on Google directs customers to their now-defunct website.
Consumers may be able to recover money as a result of this settlement from the CFPB’s victims relief fund.s