Missouri – A purchase that seemed manageable at the checkout counter could turn into a much larger financial obligation for Missouri shoppers.
Some consumers believed they were signing up for short payment plans, only to discover that their agreements carried longer commitments and higher costs.
Now, more than 3,700 Missourians are getting relief. Nearly $7 million in payments they still owed will disappear, and the merchandise they purchased will remain theirs.
Missouri Attorney General Catherine Hanaway announced that her office joined 16 other state attorneys general in a nearly $664 million settlement with Snap Finance, a consumer financing company accused of misleading customers about the costs and conditions of its lease-to-own agreements.
The agreement will eliminate $6,979,354 in outstanding lease payments for 3,707 Missouri consumers who entered into agreements between 2017 and 2022.
The cancellation will happen automatically, meaning affected customers will not have to make additional payments to gain ownership of their merchandise.
The Missouri relief is part of a much broader settlement covering consumers across 17 states. Nationwide, Snap Finance will forgive $662,102,518 in lease obligations and pay another $2.75 million to participating states.
For Missouri households affected by the agreements, the financial relief is substantial. Dividing the state’s total canceled payments among the 3,707 affected consumers produces an average of approximately $1,883 per person, although individual balances will vary.
The settlement addresses concerns about a financing model that can appear straightforward when consumers need merchandise but cannot immediately cover the full purchase price.
Unlike traditional rent-to-own businesses operating their own retail locations, Snap Finance provides its financing arrangements through independent merchants. Customers shopping at participating stores can select Snap’s lease-to-own program as one of several payment options.
Under that arrangement, Snap purchases the selected merchandise from the retailer and retains ownership while the customer makes lease payments. Ownership transfers to the customer once the financial obligations under the agreement have been satisfied.
However, the multistate investigation found that the way some agreements were presented did not adequately explain what consumers were accepting.
According to the participating attorneys general, Snap used misleading disclosures concerning the nature of its leasing arrangements and failed to give customers an opportunity to review their complete contract terms before committing.
Some customers believed they had agreed to repayment periods lasting 100 days or less. Instead, they found themselves bound to longer contracts that ultimately cost more than anticipated.
Investigators also identified problems involving claims about credit scores. Customers were allegedly led to believe that making timely lease payments could improve their credit ratings, even though the product did not provide that promised benefit.
Returning merchandise created another obstacle. Consumers encountered serious communication difficulties when attempting to surrender products and end their leasing arrangements, according to the investigation.
Hanaway said Missouri consumers should be able to understand their financial obligations without confronting misleading information or unexpected conditions.
“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.”
Beyond canceling existing debts, the settlement establishes new restrictions on how Snap Finance can advertise and administer its lease-to-own products.
The company must stop using potentially deceptive advertising phrases, including “cash payoff,” “same as cash,” and “no additional fees required,” when those descriptions could conceal the actual cost of an agreement.
Snap must also present customers with the full financial terms and total lease costs, consistent with applicable state laws, before they sign their contracts.
The changes extend to what happens after a purchase. Snap must follow clearer requirements for repairing or replacing leased merchandise when those responsibilities apply.
Customers must also receive understandable information about their right to terminate a lease. The company cannot obstruct that process and must provide practical methods for returning merchandise.
Importantly, the agreement requires protections against additional payment obligations accumulating while termination requests are being processed.
Snap is further prohibited from making misleading representations about whether applying for or using its lease-to-own financing can improve a consumer’s credit score.
To reinforce those requirements, Snap must provide initial and ongoing training for merchants involved in offering its products. The company will also submit annual compliance reports for three years.
Snap cooperated with the states during their investigation and agreed to implement the required changes.
Missouri will separately receive $150,000 from the settlement, with that money directed to the state’s merchandising practices revolving fund.
The settlement was led by Iowa and Nebraska, with Missouri joining Arkansas, Florida, Georgia, Idaho, Kansas, Kentucky, Louisiana, Mississippi, North Dakota, Oklahoma, Texas, Utah, West Virginia and Wyoming.
For the thousands of Missouri consumers covered by the agreement, the immediate outcome is clear: their remaining qualifying lease balances will be canceled, and they can keep their merchandise without further payments.
The broader impact lies in the new consumer protections. The settlement seeks to ensure that future customers understand what a lease will actually cost, how long their obligations will last and what options they have if they decide to end an agreement.
