Editor’s note: This article has been updated to include details of an additional FTC settlement and Aaron’s share price.
Aaron’s, the rent-to-own chain based in Cobb County, has been hit twice in two days by the Federal Trade Commission over alleged violations.
On Thursday, the retailer, which sells furniture, electronics and appliances, announced a $175 million proposed settlement with the FTC related to the company’s disclosure practices with consumers.
On Friday, the FTC announced a separate settlement of charges that Aaron’s and rent-to-own operators Buddy’s Newco, LLC and Rent-A-Center negotiated and executed agreements in violation of federal antitrust law.
In that case, the FTC claimed that from June 2015 to May 2018, the three companies struck anti-competitive agreements with each other and other rivals. They allegedly agreed to swap customer rent-to-own contracts, and as a result one company would close stores and exit a local market while competitors remained, according to the FTC complaint. The agreements called for the seller not to compete within a territory, typically for three years, the FTC claimed.
Aaron’s declined to comment Friday on the settlement of that case.
The company’s stock price fell more than 20% between Wednesday’s closing price and midafternoon Friday. During that time, the company also reported its latest financial results.
The FTC’s consent agreements ban the companies and their franchisees from entering into such agreements or enforcing remaining non-compete clauses.
Just a day earlier, Aaron’s chief executive officer John Robinson said in a press release that the company’s Progressive Leasing unit would make a $175 million payment in a proposed FTC settlement and “enhance certain compliance-related activities, including monitoring, disclosure and reporting requirements.”
Aaron’s settled “to avoid the distraction and uncertainty caused by protracted litigation,” Robinson said in the release.
An FTC spokesman declined comment on actions that haven’t been finalized by commissioners.
Aaron’s reported earlier that the FTC was investigating disclosures related to lease-to-own and other financial products and whether Progressive Leasing violated the FTC Act and the Restore Online Shoppers’ Confidence Act. Progressive provides lease-purchase options for goods at about 20,000 U.S. locations of other retailers.
The company had disclosed that the FTC also had been investigating it on an unrelated matter: possible violations tied to the purchase and sale of customer lease agreements. Aaron’s said earlier that while it believes it complied with the law, it agreed to a proposed prohibition on such sales in the future and was waiting for the FTC to finalize the agreement.
Aaron's also faces a lawsuit filed this week in Cobb County State Court, in which a bill collector claims the rent-to-own company sold it allegedly delinquent consumer debts that weren't valid or had other legal issues. Aaron's declined to comment on the suit.
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