Economic Development

Growing Conscious Consumerism: Understanding the Rent-to-Own Industry in NYC

For our workforce development colleagues: you know the importance of financial education and empowerment in positioning your participants to maintain jobs and build sustainable employment. However, protecting the communities you work with from predatory financing and lending practices that put them at long-term risk can be a challenge. One piece of the solution is understanding where financial risks lie. We recently conducted a survey of practices in the Rent-to-Own (RTO) industry in New York City to understand how RTO stores conduct business and help explore ways in which consumers can identify risks within these types of agreements. Our research – including interviewing subject matter experts, conducting outreach to consumers, and doing our own secret shopping – taught us a lot about this sometimes illusive industry. We wanted to relay a few of our learnings in the interest of raising awareness around these issues and informing how RTO might impact your clients or program participants.

First, how it works: RTO is a service directed to consumers who immediately need specific products such as appliances or household furniture, but may not have the funds on hand to make a purchase outright. An RTO retailer will rent those products to consumers through a modest upfront payment, followed by recurring installments for an agreed to period of time until the product is paid off. Unfortunately, many who enter these rental agreements can end up paying more than 2.5 times the purchase price of a product through the structure of monthly payments and interest over their rental term. For example, during our secret shopping we found that a television marked $699.99 at Best Buy might be $1,049.99 in total fees at an RTO establishment. Simply put, that’s a bad deal.

Second, things to look out for:

  • In NYC, RTO chains are consolidated in neighborhoods with above average poverty rates, including areas in the South Bronx, Upper Manhattan, Central Brooklyn, and Southeast Queens. By mapping Aaron’s and Rent-a-Center locations in NYC, two of the nation’s largest RTO retailers, we found that they are predominantly situated in or near areas with more than 20% of households in poverty.
  • Our research suggested that RTO salespeople frequently focus their pitch on the product, and are often vague or unclear about the rental payment terms. They often do not share written terms until after you’ve agreed to purchase an item. Consumers also noted difficulty in getting RTO salespeople to provide clear and informative responses to their questions.
  • Even when rental terms are provided, consumers expressed confusion on how to assess those terms and admitted they didn’t understand what they were getting into – or the ultimate costs – before committing to the purchase.
  • Consumers noted the negative effects of missing just one rental payment. RTO retailers reportedly hire collection agencies to collect missed payments, using employer information and personal references to track down consumers.

Raising awareness around RTO and these practices is a critical next step in helping protect consumers. It may sound straightforward, but encouraging consumers to request and thoroughly review payment terms before signing any rental agreement is likely to go a long way in helping them to protect themselves. While our survey represents initial consumer engagement, further research and outreach would help surface nuances to the experience and challenges faced by consumers in NYC, which in turn will help inform actionable solutions. We encourage you to raise awareness around RTO within your organizations and keep an eye out for when your participants may have fallen victim to unfavorable rental terms.

Winter 2016 Newsletter: Exciting Projects | New Staff | We’re Hiring!

Public Works Partners wishes our colleagues and clients a healthy and impactful 2016. We wanted to take a few moments to share with you some of the success we helped deliver for our clients in the latter half of 2015. It’s helped us to succeed, too, as we have continued to grow to help organizations like yours be more effective. We look forward to continuing to help those organizations that help our communities!


Youth workforce partnerships in Philadelphia, Cleveland, Hartford, Indianapolis and Seattle will benefit from $6 million in grants over four years, thanks to a thoughtful RFP that Public Works Partners helped the Annie E. Casey Foundation develop to launch its Generation Work Initiative.

Through research that included a series of youth-centered focus groups that PWP led in eight cities across the country, we helped Cities for Financial Empowerment Fund highlight the ability to advance positive youth development by integrating financial empowerment into summer youth employment programs (SYEP). Now we are working with the CFE Fund to understand youth perceptions and experiences of mainstream financial services to better inform banking access initiatives that target youth and young adults. Through both efforts we are enabling CFE to inform the design of SYEPs around the country.

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Growing Small Businesses; Promoting Public Health; Developing Career Pathways

New Projects

It’s been an exciting first half of the year for Public Works Partners!

  • We are thrilled to be helping the NYC Department of Small Business Services implement Small Business First, Mayor de Blasio’s 30-point plan to reduce the regulatory burden on small businesses and improve communication between business owners and City government.
  • Building on work over the past year, the NYC Change Capital Fund has asked us to continue to provide support and TA to five dynamic community development organizations across the city as they implement data-driven performance management strategies.
  • We facilitated a leadership retreat for NYC Department of Health & Mental Hygiene’s Division of Prevention & Primary Care. We helped them develop a slate of specific, measureable goals for the coming year intended to reduce health inequality experienced by different populations across the city.
  • We continue to invest our efforts in the best on-the-ground ways to design and implement career pathways. In April, we led a productive session at the NYC Employment & Training Coalition’s annual policy forum on exploring exactly how employment and training providers can play a leading role in shaping effective career pathway strategies for NYC to the benefit of their clients. We also participated in the Career Pathways Learning Lab to explore the ways employment and training providers can collaborate to turn theoretical career pathways into actual ones. Finally, we have been asked by an international foundation to research the potential for career pathways in the hospitality sector.

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