FTC staff conducted a nationwide survey of rent-to-own customers. Between December 1998 and February 1999, over 12,000 randomly selected U.S. households were surveyed, identifying over 500 rent-to-own customers who were interviewed about their experience with rent-to-own stores.

The survey had three primary goals:

1. to examine who uses rent-to-own transactions and how they differ from consumers who do not
2. to determine whether rent-to-own transactions typically result in the purchase of the rented merchandise, and
3. to determine whether abusive collection practices are widespread in the industry.

Survey Findings:

* 2.3 percent of U.S. households had used rent-to-own transactions in the last year, and 4.9 percent had done so in the last five years. Compared to households who had not used rent-to-own transactions, rent-to-own customers were more likely to be African American, younger, less educated, have lower incomes, have children in the household, rent their residence, live in the South, and live in non-suburban areas.

* Thirty-one percent of rent-to-own customers were African American, 79 percent were 18 to 44 years old, 73 percent had a high school education or less, 59 percent had household incomes less than $25,000, 67 percent had children living in the household, 62 percent rented their residence, 53 percent lived in the South, and 68 percent lived in non-suburban areas.

* Seventy percent of rent-to-own merchandise was purchased by the customer. The purchase rate was consistently high (at least 60 percent) across most demographic groups. Purchases also were widespread across most customers, with 70 percent of customers purchasing at least one item of merchandise.

* Sixty-seven percent of customers intended to purchase the merchandise when they began the rent-to-own transaction, and 87 percent of the customers intending to purchase actually did purchase.

* Seventy-five percent of rent-to-own customers were satisfied with their experience with rent-to-own transactions. Satisfied customers gave a wide variety of reasons for their satisfaction, favorably noting many aspects of the transaction, the merchandise and services, and the treatment they received from store employees.

* Nineteen percent of rent-to-own customers were dissatisfied with their experience, and most cited rent-to-own prices as the reason. Complaints about high prices were made by 27 percent of all rent-to-own customers, including nearly 70 percent of dissatisfied customers, and a significant percentage of satisfied customers. Smaller percentages of customers (between one and eight percent) complained about problems with the merchandise or repair service, the treatment received from store employees, the imposition of hidden or added costs, and other miscellaneous issues.

* Nearly half of all rent-to-own customers had been late making a payment. Sixty-four percent of late customers reported that the treatment they received from the store when they were late was either “very good” or “good,” and another 20 percent reported that the treatment was “fair.” Fifteen percent of late customers reported being treated poorly when they were late, including 11 percent who indicated possibly abusive collection practices.