Colorado joined dozens of other states and the federal government in reaching a $35 million settlement against a financing company that allegedly misled thousands of consumers across the country into believing they were making payments to purchase products.
Instead, the company steered consumers into a lease plan with ongoing payments and made the products nearly impossible to return.
In many cases, Tempoe LLC, kept withdrawing automatic payments from bank accounts for up to three years, and in spite of consumers’ protests, according to case documents.
The complicated, confusing structure of the agreements, along with a lack of required disclosures, often led to consumers paying two to three times the original purchase price of the product or service, as stated by the Colorado Attorney General’s Office.
“Consumers should be able to trust what a business says they’re getting for their money and how much it really costs,” Colorado Attorney General Phil Weiser stated in a press release. “Thanks to the work of this bipartisan, multistate coalition, consumers won’t be on the hook for Tempoe’s deceitful business practices, and the company will never again be able to trick people into signing deceptive lease agreements.”
The settlement requires Tempoe to close and refund all current consumer accounts, no matter their standing. More than 260 Coloradans will receive an estimated total of $400,000, according to the state office.
Nationally, 19,300 customers will split a total of more than $33 million, according to the U.S. Consumer Financial Protection Bureau (CFPB). All will be allowed to keep their merchandise. Also, Tempoe cannot report negative information to their credit agencies.
“By hiding the true nature of the agreements,” a CFPB press release explained, “Tempoe tricked consumers into signing the leases, and consumers found themselves unable to return products and on the hook for unexpectedly large payments.”
CFPB estimated Tempoe generated approximately $192 million in revenues from about 325,000 consumers from its unlawful conduct between 2015 and April 2022. It purchased products – namely auto parts, large home appliances, furniture, toys, and jewelry – directly from major retailers such as Sears and Kmart. The company would then reject consumers for conventional financing and present them the company’s lease as a resolution. Consumers made periodic payments for an initial term of five months, after which they had to decide whether to purchase the items with a large additional payment, or return the property and receive nothing in return, as described by the CFPB.
Tempoe, registered in Delaware and with major offices in Manchester, New Hampshire and Cincinnati, continues to deny and dispute the allegations of any wrongdoing and any liability, according to the settlement agreement. However, that agreement disallows the company from taking part any leasing activity in the future.
Nebraska, Iowa, Tennessee, Illinois, New Hampshire, Pennsylvania, and Texas led the group of states pursuing action against Tempoe. The rest consisted of Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and the District of Columbia.
CFPB reached a separate $2 million settlement of its own with Tempoe.