Rent-to-Own Companies Exploit Working Class Communities
By Sara Jaffri
“Leasing makes it easy to own what you want! Your life your way!” reads a sign at the local Markham and Eglinton Easyhome store. The company’s Scarborough location is stocked with televisions, refrigerators, sofa sets and cell phones that can be rented for low weekly prices on a short term basis, or until owning them.
The rent-to-own company operates a chain of over 200 stores throughout Canada and has nine stores in Toronto, primarily located in low-income neighbourhoods.
Leslie, a 65-year-old resident of Scarborough, rents two television sets and a stove from Easyhome. As a parent of six adults and grandparent of twelve children, these basic household items are a necessity for Leslie’s family.
Although Easyhome markets to low-income communities as an affordable way to access furniture and other household items, ultimately owning the products means paying much more than the retail price.
Leslie is aware that it is expensive to rent in the long run, but he cannot afford any other option. “If I walked into Walmart, I wouldn’t be able to purchase things because of the credit check.”
Unless customers buy products from Easyhome at its full price within the initial 90-day period of their lease, interest starts accumulating, leading to some very hefty profit margins for Easyhome and very hefty debt for renters.
For example, a 32-inch Samsung LED TV can be rented at $12 a week for up to 156 weeks, or three years. A weekly bill of $12 does not seem very intimidating, but if customers wanted to rent-to-own the product, they would end up paying a whopping $1,872 at the end of their 156-week term. The same television at regular electronics retailers such as Best Buy sells for $179.99. That’s a $1600 difference.
As Leslie learned the hard way, Easyhome customers have to be very careful in their payment schedule when dealing with the rent-to-own company. He was taken by surprise when charged an additional $7 for each of the three items he rents, saying that he was never told upfront about late penalties. When he expressed his frustration at being charged late payment fees and challenged Easyhome, customer representatives dismissed his concerns and told him to “read the fine print.”
An Easyhome employee we spoke to explained just how easy it is for the company to exploit low-income customers, who often get used products. Customers do not have to go through a credit check, and are simply required to demonstrate proof-of-income, an address and references. Easyhome uses various strategies to attract more customers in the low-income neighbourhoods where they operate, including accepting child tax income as proof of a renter’s ability to make their weekly payments.
Easyhome customers also have the option to commit to a one, two or three-year lease for any item, and can change lease-terms whenever they want. According to an Easyhome employee, the option to break from the lease, penalty-free, incentivizes customers to commit to long-term leases, which they end up paying high interest on.
Leslie is well aware that such long-term leases are really a means for poorer people to get trapped into debt and overpay compared to retail prices. However, ultimately he feels that the fault lies within the economic and political system, which enables companies to prioritize their economic interests over fairness. “Its not them (Easyhome) I’m angry at, it’s the system. I’m shitting on the system and politicians, not Easyhome.”
The system that Leslie rejects is one in which corporate gains are made through the long-term economic and social exploitation of working class people and communities. The various groups of business owners, stock market investors, and politicians make sure that corporations throughout Canada continue to solidify their financial and political power. Meanwhile, workers’ wages are kept low as the cost of living continues to rise.
We must defend ourselves against companies that steal our hard-earned wages and make profits off our backs. Together, we can resist falling prey to corporate marketing schemes and stand united against the exploitative practices of businesses that operate in our communities.