CFPB sues Acima and its founder for illegal lending practices

The CFPB on Friday announced it has sued Acima Holdings, LLC, Acima Digital, LLC (subsidiaries of Rent-a-Center (now known as Upbound Group, Inc.), and collectively, "Acima"), and Acima's founder and former CEO, Aaron Allred for illegal lending activities in connection with as many as five million consumer financing agreements.

The CFPB alleges Acima used deceptive dark patterns and other tricks to trap consumers in high-cost credit agreements to finance the purchase of household goods. Acima sought to disguise many of these credit agreements as leases to evade consumer financial protection laws. Due to Acima’s deception and obstruction, many consumers did not understand they were agreeing to expensive markups, exorbitant finance charges, and having few ways to escape their contracts. The CFPB is asking that the court order the defendants to forfeit the illegally obtained profits, give refunds to consumers, and halt their misconduct.

The CFPB’s lawsuit alleges Acima violated the Consumer Financial Protection Act, Truth in Lending Act, Fair Credit Reporting Act, and Electronic Fund Transfer Act. Specifically, the CFPB alleges Acima has misled and harmed consumers through:

• False marketing
• Deceptive digital dark patterns
• Trapping borrowers
• Widespread credit reporting failures