Snap Finance Reaches $664.9 Million Settlement With 17 States Over Lease-to-Own Practices

Case Snapshot

• Enforcement Authority: Attorneys general of 17 participating states, led by Iowa and Nebraska.
• Matter: Multistate investigation and Assurance of Voluntary Compliance involving Snap Finance LLC and Snap RTO LLC.
• Settlement Date: Oct. 21, 2026.
• Core Issue: Allegedly deceptive lease-to-own agreements, consumer disclosures, servicing practices, and collection communications.
• Key Allegations: Misleading payment terms, inadequate contract review opportunities, inaccurate credit score representations, and difficulties terminating leases or returning merchandise.
• Court Holding: None. The matter was resolved through a voluntary settlement without an adjudication of liability.
• Outcome: Approximately $664.85 million in total relief and payments, including $662.1 million in lease forgiveness for 303,223 consumers and $2.75 million paid to participating states.
• Notable Detail: Consumers receiving lease forgiveness will retain ownership of their merchandise without additional lease payments. Snap must also complete three years of compliance reporting.

Snap Finance has agreed to a $664.9 million multistate settlement with 17 state attorneys general, including more than $662 million in lease forgiveness for over 303,000 consumers, following an investigation into allegedly deceptive lease-to-own agreements, debt collection practices and consumer disclosures.

The agreement, announced Oct. 21, was led by the attorneys general of Iowa and Nebraska. It requires Snap Finance to cancel certain outstanding lease balances, transfer ownership of merchandise to affected consumers and implement changes to its advertising, servicing and compliance practices.

According to the Nebraska Attorney General’s Office, investigators identified concerns involving misleading contract terms, confusing payment arrangements, credit reporting representations and obstacles consumers encountered when attempting to return leased merchandise.

Snap cooperated with the investigation and entered the settlement without admitting liability or violations of state or federal law.

More Than 303,000 Consumers to Receive Lease Forgiveness

Under the settlement, Snap Finance will forgive $662,102,518 in outstanding lease obligations for 303,223 consumers across the participating states. The company will also pay $2.75 million to the states, bringing the total settlement value to approximately $664.85 million.

The debt cancellation applies to qualifying lease-to-own agreements entered into between 2017 and 2022. Eligible accounts must have remained under Snap’s control in November 2025 and been classified as charged off.

Affected consumers will receive automatic forgiveness of their remaining lease obligations and ownership of the merchandise covered by their agreements, eliminating further payments on those accounts.

Texas accounts for the largest share of relief, with approximately $344.5 million in forgiveness covering 148,295 accounts. Florida follows with $135.6 million across 62,753 accounts, while Georgia consumers will receive approximately $65.1 million in relief across 31,647 accounts.

The settlement covers Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Oklahoma, Texas, Utah, West Virginia and Wyoming.

Investigation Identified Disclosure and Collection Concerns

Snap Finance offers lease-to-own arrangements through third-party merchants, allowing consumers to obtain merchandise through periodic payments rather than paying the full purchase price upfront.

State investigators alleged that consumers were sometimes led to believe they had entered short-term payment arrangements lasting 100 days or fewer when their agreements actually provided for longer payment periods and substantially higher total costs.

The investigation also raised concerns that customers could not adequately review their agreements before signing and that some were incorrectly informed that making timely lease payments could improve their credit scores.

State officials additionally examined Snap’s collection practices and the difficulties some consumers reportedly encountered when attempting to terminate agreements or return merchandise.

Settlement Establishes New Servicing and Compliance Requirements

The agreement imposes restrictions on Snap’s advertising, disclosures, collections and account servicing practices in the 17 participating states.

Snap must clearly disclose the total cost of its lease-to-own agreements, provide consumers an opportunity to review contracts before signing, and make executed agreements accessible afterward. Advertising must accurately describe early purchase options and cannot misleadingly suggest that lease payments will improve a consumer’s credit rating.

The agreement also addresses collection communications. Snap cannot suggest that nonpayment will result in property seizure when repossession is not its actual practice.

For consumers seeking to terminate leases, Snap must provide clear surrender procedures and temporarily pause the accrual of renewal payments for a commercially reasonable period while processing termination requests.

Additional requirements address property repairs, replacement obligations, payment-method changes, and merchant training.

Snap has 180 days from the agreement’s effective date to implement required business practice changes, subject to provisions allowing extensions. It must also conduct annual compliance reviews and submit reports for three years.

The agreement’s principal advertising, disclosure, and servicing requirements remain in effect for five years.