Attorney General Hanaway Secures $6.9 Million in Forgiveness for Thousands of Missourians Misled by Snap Finance

JEFFERSON CITY, Mo. – Attorney General Catherine Hanaway announced today that she joined a coalition of 17 attorneys general in a nearly $664 million settlement with Snap Finance. As part of the settlement, Snap Finance will automatically cancel $6,979,354 in lease payments owed by 3,707 Missourians who entered into lease-to-own agreements from 2017 to 2022. These Missouri consumers will be able to keep and own their merchandise with no further payments.

“We will never tolerate misleading agreements or false disclosures that exploit hardworking Missourians facing personal crisis or unexpected essential expenses,” said General Hanaway. “Consumers have a right to see and understand the full terms of any agreement before they commit to it.”

Snap Finance (Snap) is a consumer financial services company that offers a lease-to-own (LTO) agreement through merchant partners rather than through its own brick-and-mortar stores like traditional rent-to-own stores. Snap’s LTO product is often one of multiple purchasing options offered by a single merchant. When a customer selects the Snap LTO option, Snap purchases the merchandise from the merchant, Snap takes the title or owns the merchandise, and then Snap leases it to the customer until the customer pays off the full cost of the lease under the agreement.

The states investigated Snap’s alleged violations of consumer protection laws and found that Snap used misleading disclosures about the nature of its leasing arrangements. Snap also did not allow customers to view the full terms of their contracts, and customers experienced extreme communication issues as they tried to return products.
Some customers thought they were entering into agreements with short pay-back windows of 100 days or fewer but instead entered into long-term contracts that ended up being more expensive. Customers were misinformed that leasing a product and making on-time payments could increase their credit score, but that was not the case.
Snap cooperated with the settling states’ investigation and has agreed to the following business practice changes to address the states’ concerns:

• Advertising restrictions: Snap has agreed to not use misleading slogans such as “cash payoff,” “same as cash,” and “no additional fees required,” that potentially hid the true cost of the lease a customer was agreeing to.
• Disclosure and transparency: Snap must ensure that customers are shown the full terms and cost of a lease in accordance with state law before the lease can be signed.
• Servicing protections: Today’s settlement makes it clear when Snap must repair or replace property that a customer leases and ensures Snap will do so.
• Disclosures about credit ratings: Snap is prohibited from misrepresenting that applying for a lease or utilizing Snap’s LTO product will help customers increase their credit score.
• Lease termination and surrender: Snap is required to provide clear disclosure of the right to terminate a lease, and Snap is prohibited from interfering with that right.  Additionally, the settlement requires practical ways for a customer to return property when terminating a lease while pausing payment accrual when termination requests are processed.
• Merchant training and compliance: Snap must meet certain initial and ongoing training requirements and provide annual compliance reports for three years.

Total lease forgiveness for consumers in all settling states will be $662,102,518. Snap is also paying $2,750,000 to the states. Missouri will receive $150,000 to go into the merchandising practices revolving fund.

Missouri is a party to the Iowa- and Nebraska-led settlement, which is also joined by the states of Arkansas, Florida, Georgia, Idaho, Kansas, Kentucky, Louisiana, Mississippi, North Dakota, Oklahoma, Texas, Utah, West Virginia, and Wyoming.

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