Watch out for tricks when you sign up for a lease

Some companies hide fees and terms in contracts when you lease a product.

Tempoe, an Ohio-based nonbank consumer finance company, offered financing to customers at retailers such as Sears and Kmart.

Usually, consumers were offered Tempoe’s financing after being rejected for financing at a retailer. Consumers made payments for five months, then had to decide whether to purchase the items with a large additional payment, or return the property and receive nothing.

Consumers were offered leases for items such as auto parts, large appliances, furniture, toys, and jewelry. Tempoe would pay the retailer for the item, charge the consumer a payment, and then charge additional payments on a bi-weekly or monthly basis.

Tempoe tricked consumers into expensive leasing agreements by concealing the contract terms and costs, and failing to provide required disclosures, according to the Consumer Financial Protection Bureau.

In a settlement, the CFPB is banning Tempoe from offering consumer leases, requiring the company to close its outstanding consumer accounts, and ordering it to let customers keep leased merchandise with no further payment, about $33.6 million in released payments. Tempoe is also paying a $2 million penalty, with $1 million deposited into CFPB’s victims relief fund and $1 million paid to the states entered into the settlement.

So be sure to read the fine print carefully before you sign any lease. And, be aware some leasing companies may engage in deceptive practices.