Attorney General Ellison reaches $35M settlement with leasing company Tempoe, LLC
Company ‘operated like a predatory payday lender’: marketing and sales practices misled consumers seeking credit for purchases into entering into complicated lease agreements, often resulting in consumers paying 2-3 times more
All existing consumer leases to be cancelled with no further financial obligation; Tempoe permanently banned from engaging in future consumer leasing
September 12, 2023 (SAINT PAUL) — Minnesota Attorney General Ellison announced today he and a bipartisan coalition of 42 attorneys general have a reached a settlement with Tempoe, LLC that resolves a multistate investigation into Tempoe’s advertising and leasing to consumers through retailers across the nation. Tempoe markets itself as a “no credit needed” company for consumers to buy furniture, electronics, appliances, and other items. The multistate investigation revealed that Tempoe’s marketing and sales practices often misled consumers — who were often low-income — into believing they were signing up for an installment plan or credit sale when in reality, they were entering into a lease agreement. The complicated structure of the lease agreements, as well as the lack of required disclosures, often resulted in consumers paying 2-3 times the purchase price of the product or service.
“Tempoe operated like a predatory pay-day lender, misleading low-income Minnesotans into paying two to three times more for necessary purchases like appliances or car parts than the products actually cost,” Attorney General Ellison said. “Preying on people who are just trying to afford their lives is despicable. I was proud to join this bipartisan investigation and I’m proud we’ve shut down this behavior. Tempoe won’t be taking advantage of people like this again.”
Through this settlement, Tempoe is permanently banned from engaging in future consumer leasing activities in Minnesota and across the nation. All existing leases will be cancelled, and consumers may retain the leased merchandise in their possession without any further financial obligation to Tempoe — resulting in approximately $33 million in in-kind financial relief to consumers nationwide. Additionally, Tempoe shall not provide negative information regarding lessees to any consumer reporting agency.
Consumers with existing leases do not need to take any action, as Tempoe has automatically cancelled their accounts per the terms of this settlement. Tempoe is required to contact all existing lessees — regardless of whether a lessee is current or past due on their account — to inform them that their account is closed and that they are entitled to retain the leased products or services with no further financial obligation.
Approximately 19,300 consumers across the country are affected by this settlement. Within 90 days, Tempoe is required to provide Minnesota and all participating states with a report identifying each account for which it completed this notification. State-level data about the numbers of consumers affected will be available at that time.
Any Minnesota consumers with a Tempoe account who do not hear from Tempoe within 90 days should contact Attorney General Ellison’s office at (651) 296-3353 or (800) 657-3787.
Finally, as part of this settlement, Tempoe will pay $1 million to the states and jurisdictions participating in this settlement and $1 million to the Consumer Financial Protection Bureau, which has agreed to a parallel settlement resolving the same alleged misconduct.
The settlement agreement was filed in Ramsey County District Court.
Attorney General Ellison joined the attorneys general of 41 other jurisdictions in the settlement. The settlement was led by the attorneys general of Nebraska, Iowa, Tennessee, Illinois, New Hampshire, Pennsylvania, and Texas, and is joined by the attorneys general of Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.