Iowa Attorney General Brenna Bird announced a $35 million settlement with financing company Tempoe LLC as part of a multi-state investigation into the company’s deceptive advertising and leasing practices on Monday afternoon.
The settlement allows Iowans that entered into lease agreements under false pretenses with the company to keep the leased items without further financial obligation to Tempoe.
Bird joined 41 other states in the investigation that found that Tempoe deceived consumers into entering into lease agreements that were advertised as installment plans or credit sales for products like tires, mattresses, and lawn and garden tools.
Under the settlement agreement, Tempoe is banned from engaging in commercial leasing activity in the state and will have to pay $2 million in penalties, $1 million to the Consumer Financial Protection Bureau, and $1 million to the states involved in the settlement.
According to the news release by Bird’s office, Iowans were paying two to three times the sale price of a product when leasing through Tempoe.
“No Iowan should be tricked into paying three times the purchase price for a product,” Bird said in the release.
According to a news release from the U.S. Consumer and Financial Protection Bureau, consumers made five monthly payments on the products then, unless consumers actively selected to purchase or return the items to Tempoe, would be charged for a month-by-month lease of the items.
Tempoe’s accounts totaled $33 million nationwide and as part of the settlement Tempoe cannot make negative reports to credit bureaus on the accounts.
Iowans that fell victim to Tempoe’s tactics do not need to take further action, according to the release by Bird’s office. Tempoe has proactively closed all accounts subject to the settlement.
