Many people who rent-to-own furniture and other goods in Texas don’t realize failing to make payments can result in criminal charges or even a term in jail.
However, a bill enacted this summer by the Texas legislature has helped close a loophole that allowed people who could not afford to make payments to be prosecuted.
For years, companies in Texas have been able to file criminal charges against people who fail to make payment for their products under rent-to-own contracts.
A clause added to the Texas Penal Code in 1977 allows felony charges and up to two years in jail for people who default on payments for furniture. The Texas Tribune reported rent-to-own companies have pressed charges against thousands of Texas. Some of them made most of their payments and others returned the loaned items. The ability to press charges for unpaid bills is unique to the rent-to-own industry and is only allowed in certain states. The Tribune reported only two people testified in favor of the bill in 1977: a pair of lobbyists for the rental industry. No one opposed it.
Critics of the law likened it to a debtor’s prison. Earlier this year, a new bill tackled the unconstitutional prosecution of people for their inability to make payments to the rent-to-own companies.
A new law that comes into force in September will prevent rent-to-own companies from prosecuting people who are unable to keep up with payments under Texas’ “theft of service” statute.
However, the rent-to-own companies will still be able to press for charges against people who try to abscond with goods or are ill-intentioned. It removes the original presumption that customers who don’t return goods or respond to a certified letter after they miss a payment intend to steal the goods.
The Tribune reported consumer advocates, criminal prosecutors, and rent-to-own companies including Rent-A-Center based in Plano, provided input into the bill that was signed by Governor Greg Abbott on June 14. The bill was sponsored by state Sen. Morris Miles who said rent-to-own companies, which are used by many low-income people, habitually use the criminal justice system to collect on debts that should be handled using civil remedies.
However, the change may strengthen the hand of rent-to-own companies against people accused of willful failure to pay. It reduces the time certain renters have to respond to a letter before a company can press charges.
The theft-of-service statute still applies to traditional rental businesses that lease cars, heavy machinery, and other tools. Rent-to-own companies can press prosecutors to file theft charges against their people if it’s clear the renter intended to steal the property.
Our experienced Dallas defense attorneys can help you if you have been charged with a crime under the ‘theft of service’ statute or any other offense. Please call us today at (214) 720-9552.