More than 1,300 Nebraska consumers will have their remaining lease payments canceled and keep their merchandise under a multistate settlement with Snap Finance, Attorney General Mike Hilgers announced Wednesday.
The nearly $664 million settlement includes $2,652,091 in canceled payments for 1,349 Nebraska consumers who entered into lease-to-own agreements from 2017 through 2022. The relief will be automatic, and affected consumers will receive ownership of their merchandise without making further payments, according to the attorney general’s office.
Nebraska and Iowa led the settlement with Snap, a consumer financial services company that offers lease-to-own agreements through retail partners.
State investigators found that Snap used misleading disclosures, failed to let customers review full contract terms and created communication barriers for customers trying to return merchandise, according to Hilgers’ office. Investigators also examined confusing payment terms and potentially improper debt collection practices.
Some customers believed they had agreed to repayment periods of 100 days or fewer but instead entered longer, more expensive contracts, the office said. Customers also were incorrectly told that leasing merchandise and making payments on time could improve their credit scores.
Hilgers said the agreement provides relief for consumers and seeks to prevent similar problems. “We are pleased to settle alongside partnering states to bring relief to those financially harmed by Snap Finance and prevent future harm,” he said in a statement.
Snap cooperated with the investigation and agreed to change its business practices, according to the attorney general’s office. The agreement requires the company to disclose full lease terms and costs, avoid misleading advertising and stop misrepresenting whether its products can improve customers’ credit scores.
The company also must provide clear information about customers’ rights to terminate leases and cannot interfere with those rights. Other requirements address repairs and replacements of leased merchandise, prohibit false threats to seize property and establish training requirements.
Snap must submit annual compliance reports for three years. Affected Nebraska consumers will have their remaining payment obligations eliminated and ownership of their merchandise transferred to them.