Tempoe Customers to Receive Payout in $191.9 Million CFPB Action

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The Consumer Financial Protection Bureau (CFPB) announced on October 28 that over 250,000 customers harmed by leasing company Tempoe, LLC can expect to get a refund check in the mail.

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The payments are part of a consent order the CFPB issued against Tempoe in September 2023. According to the CFPB, Tempoe tricked consumers into entering expensive leasing agreements for auto parts, large home appliances, furniture, toys, jewelry and other items or services by concealing the true nature of its contract terms and costs.

Tempoe’s deceptive and illegal practices trapped customers into paying for merchandise they couldn’t afford or return, the CFPB said.

The CFPB’s consent order has permanently banned Tempoe from offering consumer leases, which were presented to customers at the point of sale at retailers such as Sears and Kmart.

Tempoe is also required to pay a $2 million penalty into the CFPB’s victims relief fund, a resource used to compensate consumers harmed by companies that violate consumer financial protection laws. As such, the CFPB has allocated more than $191.9 million from the victims relief fund to distribute to certain consumers who entered into lease agreements with Tempoe from January 1, 2015 to September 11, 2023, the agency said.

The CFPB found that Tempoe often kept its leasing terms secret by providing a copy of its agreement only after a consumer had completed their transaction, or sometimes never at all. Per the CFPB order, employees were encouraged to avoid calling the arrangement a “lease,” and some customers were shocked to learn at the conclusion of their initial five-month term that they did not own their items and were required to pay far above market price to purchase the product.

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The CFPB also accused Tempoe of having “unreasonable return practices.” Allegedly, the company did not accept returns of many items, which led customers to pay extra fees to exercise the purchase option.

Tempoe’s agreements required consumers to make periodic payments for an initial term of five months, the CFPB said. Unless a consumer chose to either purchase or return the leased property at the end of this initial period, Tempoe would continue to automatically withdraw monthly payments from the consumer’s account for the full term of the contract, which was typically 18 or 36 months.

“Tempoe did not provide disclosures required under the Consumer Leasing Act and its implementing regulation, Regulation M, to consumers who continued this month-to-month leasing for more than six months,” the CFPB claimed.

Payments will go to Tempoe customers whose lease was extended on a month-to-month basis for more than six months after the initial term and who were not provided with the required additional disclosures.

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