Acima Holdings, LLC; Acima Digital, LLC; and Aaron Allred

On July 26, 2024, the Bureau filed a lawsuit against Acima Holdings, LLC and Acima Digital, LLC (collectively, “Acima”), and Acima’s founder and former CEO, Aaron Allred (“Allred”). Acima purports to offer consumers nationwide a means to “lease-to-own” consumer goods at the point of purchase online and in stores. The Bureau alleges that Acima’s purported “leases” were actually credit, and that Acima and Allred violated the Consumer Financial Protection Act’s (CFPA) prohibition against unfair, deceptive, and abusive acts and practices by: misleading consumers regarding the nature and terms of Acima’s agreements, including their exorbitant cost; materially interfering with consumers’ ability to understand the terms and conditions of those agreements; effectively locking consumers into these high-cost financing arrangements by making it difficult for consumers to terminate them and creating unfair barriers to returns; misrepresenting consumers’ ability to return goods and the means by which returns could be accomplished; misrepresenting to consumers that their contracts required the maintenance of “autopay”; and providing deceptive advertisements and training to merchants, that created the likelihood that merchants would misrepresent the terms of Acima’s agreements, mislead consumers about the ease of returns, and create confusion about whether Acima’s product was credit or a lease. The Bureau alleges that Allred was directly involved in and “substantially assisted” Acima’s violations of the CFPA. The Bureau also alleges that Acima violated the Fair Credit Reporting Act (FCRA) and its implementing Regulation V by furnishing inaccurate information about its customers to consumer reporting agencies (CRAs); failing to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information it furnished to CRAs; failing to conduct reasonable investigations of furnishing disputes; and failing to notify consumers when it reported negative information about them to CRAs. The Bureau also alleges that Acima violated the Truth in Lending Act and its implementing Regulation Z by failing to provide required disclosures to consumers, including the annual percentage rate and finance charges. The Bureau further alleges that Acima violated the Electronic Fund Transfer Act and its implementing Regulation E by conditioning their extension of credit to consumers on repayment by preauthorized electronic fund transfers. Finally, the Bureau alleges in the alternative that, if Acima did not extend credit to consumers, Acima and Allred misrepresented that Acima’s agreements were credit and violated FCRA by using and obtaining consumer reports without a permissible purpose or consumer authorization. The Bureau seeks, among other things, injunctive relief against Acima and Allred to prevent future violations and monetary relief in the form of redress to consumers and the imposition of civil money penalties.