Help with Rent2Own Situation

Hi - I own a fledgling company where I rent equipment to consumers for 10 months. That ten months is up and I am trying to get my equipment back. I sent a nice letter with lots of wonderful information on how they could purchase the equipment at a discounted price, rent again or rent2own by sending in monthly payments and thus building credit towards the eventual purchase of the equipment. I sent this out over 30 days prior to the expiration of the rental. I put a respond by date which has since passed. I am really nice to people who respond to the letter. I had one guy call me today who felt "entitled" to an extension. It's important I get this equipment back and he didn't seem to care. What are my rights on getting equipment back if the consumer fails to return. Can I repossess the equipment?If so, when and how?In my letter, I mention that I will default bill them into a monthly payment program(rent2own). However, I don't feel confident that this will stimulate these types of people to return or simply act on the expiration of their rental agreement. I'm hoping somebody can point me in the right direction. Alot of people think they are the victims when they have creditors coming after them. However, I think it's wrong when a consumer doesn't hold up their end of the agreement. Please help.

Hello there!

What you have encountered is a risk of doing business, and this kind of risk is particularly prevalent in the rent-to-own field of operation, where clients typically have histories of credit issues. Nonetheless, you do have some options ... these options, and their implications, are as follows:

1. Issue late fees to your customer, and bill via whatever mechanism you have available -- this is easiest if your client submitted a credit card number to you in renting the equipment, especially if you had him/her sign a contract authorizing any charges for late returns or damage to the equipment. Eventually, the sheer expense will act as encouragement for the individual to return the equipment. If, however, you accepted a check or cash at the initial rental, this option pretty much dissolves since the liklihood that a potentially delinquent customer will obediently fulfill a late charge invoice is infintely low.

2. Repossess your equipment -- this, however, involves a., finding the equipment, b., traveling to the customer's location, and c., accessing and removing the equipment. As you may imagine, this is no easy feat; depending on the kind of equipment you rent, the expense to reposess it may exceed its very face value.

3. Take your client to small claims court -- along the same lines of (2), the legal fees you may incur through this route may well exceed the value of the equipment you are trying to recover. Moreover, if your client does not show up, even though you will receive a judgement in your favor, you are not magically handed over your equipment or the equivalent in damages --- the courts merely entitled you to a certain amount, and now it's up to you to collect it. And since many rent-to-own customers do not have much by way of liquidatable assets, you may once again have your hands tied.

The short of it: some businesses are more trouble than they're worth. When you reconsider a business model in the future, think of the worst possible scenario, and ask yourself if that is something you can put up with from time to time. If the answer is no, move on; but if the answer is yes, then you've founded something you can put your full effort into and watch your results thrive!

Good luck with this particular issue!

Brad