N.J. Supreme Court rules against RAC
By Furniture Today Staff -- Furniture Today, March 26, 2006
Plano, Texas — The New Jersey Supreme Court has reversed the rulings of two lower courts and reinstated the claims of a plaintiff, saying the rent-to-own transactions of Rent-A-Center in the state are subject to an installment sales law that caps interest rates.
The case was sent back to a trial court for further proceedings.
The decision reversed a trial court ruling in favor of the Plano-based chain. The lower court had dismissed all of the plaintiff's claims in Hilda Perez vs. Rent-A-Center.
An appeals court also ruled in favor of the nation's largest RTO chain.
The state Supreme Court, however, found the company's RTO transactions are subject to the state's Retail Installment Sales Act and its Consumer Fraud Act, and are subject to a 30% interest rate cap.
No findings of liability or damages have been made against the company.
"While we are clearly disappointed in the Supreme Court's ruling, particularly in light of two favorable decisions we previously received in this matter, we look forward to defending ourselves on the substance of the plaintiff's claims in the trial court," said Mark Speese, Rent-A-Center chairman and CEO.
He said New Jersey is one of only three states that does not have rental purchase legislation, and that the company doesn't believe the decision will affect Rent-A-Center in any other state.
But in New Jersey, where it operates 43 stores, Rent-A-Center "will evaluate any changes in our business practices that may be necessary to continue to do business in that state," Speese said.
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