FIGHT BACK\Rent-to-own furnishings should be last resort.

Byline: David Horowitz 

Renting furniture and appliances can be useful and expedient for a month or two for people on the move, but it's the most expensive way there is to buy home furnishings.

For example, a TV set that might cost $250 to buy outright will often rent for $15 a week under a rental purchase agreement. At the end of 65 weeks, you own the TV for a total price of $975. That's the equivalent of paying 250 percent interest.

Besides the high fees, renters face the threat that if they miss even one payment, the item can be repossessed. The only way they can get it back is to start all over again with no credit for previous payments - and it's all perfectly legal.

Court decisions in New Jersey, Minnesota and Wisconsin have defined rent-to-own arrangements as credit sales. But at least 30 states still consider them leases. Only Pennsylvania has a law defining rent-to-own contracts as credit sales with an interest cap of 18 percent.

Last year, California enacted a consumer-protection law requiring rent-to-own companies to disclose the total purchase price and fees on all rental purchases. Rental companies must maintain rented appliances during the period of the contract, pass on extended warranties when the final payment is made and allow renters to reinstate their contracts after a missed payment. But the law puts no limits on rental fees or hidden interest.

It may seem surprising that there is any market at all for this kind of purchase, with annual interest rates on credit cards and department store installment plans topping out at around 21 percent. But people who rent to own are typically low-income families who don't have the cash or credit to buy home furnishings from conventional retailers.

The answer to the problem seems obvious - enact a fair-trade law that would regulate rent-to-own agreements nationwide, with the Federal Trade Commission given powers to enforce it. Unfortunately, the anti-regulatory mood in Congress makes passage of such a law unlikely, at least for the time being.

What can low-income consumers do in the meantime? At the very least, they should shop around before signing any rent-to-own contract. Even better, they should check the want ads and discount outlets, even garage sales, for used appliances and furniture. Given the high price, renting to own should be the absolute last resort.