Rent-to-own?

Most folks in the central city know it by another name: "Rent to get ripped off."

The expanding prominence of "rent to own" stores in some parts of Milwaukee that some accuse of using predatory lending practicing to entice consumers into dubious deals for merchandise has been a concern of consumers and legislators for years.

State Rep. Mandela Barnes won office last year after running a campaign based on putting more restrictions on businesses that prey on low-income communities with pay-day loan businesses and rent-to-own stores.

He thinks many of the firms involved are simply cold-hearted business owners taking advantage of people who are trying to live the American Dream through materialistic means. 

"It's just a predatory attempt on consumers," said Barnes. "People end up taking out a loan or renting merchandise and end up paying three times what it's worth."

Barnes was talking about the controversy over a budget proposal by Gov. Scott Walker to keep rent-to-own stores from disclosing their interest rates. Walker also wants to put a cap on how much money any ripped off customers could get if they successfully sued a rent-to-own store for damages.

Many people were surprised to see the proposal to ease restrictions on rent-to-own stores in the state budget since it isn't really the kind of financial issue that is usually addressed in such a document. But then, Walker's budget contains a host of items that his critics think should be considered more as matters of policy than finance.

So far, Walker hasn't budged.

Barnes is a Democratic state legislator confused why Walker wants to give rent-to-own stores such a break in the state budget, particularly since members of Walker's own party have also raised concerns.

Barnes noted that GOP Sen. Glenn Grothman of West Bend has also denounced the rent-to-own stores for trying to exploit the most vulnerable citizens during troubled economic times.

Barnes usually doesn't end up on the same side as Grothman but said he was grateful the West Bend politician stood up to the governor on this one.

"Grothman has actually been pretty good on consumer issues," said Barnes.

For people who aren't familiar with the process, rent to own stores can provide home appliances like TV sets, furniture and other amenities to a customer on a rental contract at rates that often exceed 30 percent in interest.

It's the kind of deal that financially savvy customers usually don't pursue, but Barnes noted the real problem with rent-to-own stores was that they enticed low income residents to try to obtain things they couldn't afford.

Basically, it's an industry that depends on the financial ignorance of their customer base.

"It's about appealing to people by offering certain luxuries through deceptive practices," Barnes said, noting that items such as big screen TVs, furniture and sound systems were often desirable products for people who couldn't afford them.

 As for the argument by rental store owners that the people who patronize their establishments should know what they're getting into, Barnes said his research had revealed the stores often use deceptive practices to seal the deal.

"I just don't see the need to weaken protection for consumers. It's a deceptive practice that needs to be stopped."

It's always true that the buyer should beware but in the case of businesses that rely on fooling customers into thinking they can afford the American Dream when they really can't, the government should be trying to stop it instead of encouraging it.

In many areas of town, "rent-to-own" is nothing more than a rip-off in need of more scrutiny, not less.