Do You Know Which Missed Payment Could Make You a Felon in Texas?

Imagine this: you’re the main source of income for a family of four. Because of illness or a layoff at work, you find yourself in a tight spot. Like most Americans, you don’t have a lot in savings, so you’re going to have to tighten your belt and figure out a way to get through this. Of course, you’ve got your house and basic bills to cover. Then everyone’s got to eat. When it comes down to it, you’ve still got a car payment, a credit card bill, and a payment on the couch and love-seat you got at Rent-A-Center last year. You have to make a choice on which ones to pay now and which ones to catch up on later.

Let’s say you have $500 leftover. Which bills do you pay? (You can only afford to pay two!)

  1. Car payment $350
  2. Credit card bill $150
  3. Furniture loan $150

This is a familiar dilemma to many Texans. And as you think it over, it might make good sense to choose the wrong answers: a car is important for maintaining a job and transporting the family, and credit card debt comes with high interest rates—but what if I told you if you didn’t pick “C” in your answer, you could be thrown in jail, and worse, you could be branded forever as a thief and a felon in the Texas criminal justice system?

What most Texans don’t know is that furniture loan you got at a Rent-A-Center (or similar business), wasn’t really a loan—it was something called a “rental-purchase agreement.” And under Texas Penal Code § 31.04, “Theft of Service,” you can be criminally prosecuted for a failure to make timely payments under one of these Rent-A-Center contracts after as few 15 days after a missed payment.

But wait! Doesn’t the prosecutor still have to prove that you meant to steal beyond a reasonable doubt? Couldn’t you explain that you were just getting behind on bills because of an unexpected hardship?

Shockingly, the answer is NO.

Under this bizarre statute, the law assumes that you intended steal if the company sends you a letter and you don’t return the merchandise within 15 days from the day the letter was mailed. It doesn’t even matter whether you actually receive the letter or read it! And any evidence that you meant to catch up on payments is useless in defending yourself.

The tricky wording of the “rental-purchase agreements” used by these companies allows them to take advantage of a law that was never meant to apply to them. Passed in the 1970s—years before Rent-A-Center was founded—this law was meant to prosecute people who kept rental cars or heavy machinery without paying.

If you go to a normal furniture store and buy furniture on credit, you actually own the furniture and sign a loan agreement saying you will repay on a certain schedule. Because we have laws in America that protect you from being thrown in jail for not paying a debt, missing a payment on a typical loan will just hurt your credit score or subject you to a breach of contract lawsuit.

However, Rent-A-Center’s contracts aren’t typical sales and loan agreements. Instead, these “rental-purchase agreements” are actually a series of short (weekly or monthly) “rental periods.” Because of the way current law and “rental-purchase agreements” work together, your failure to pay becomes criminal theft and could subject you to jail time. If the “value” of the property you’ve rented exceeds $2,500, you could also be indicted and convicted as a felon.


In Waco and across Texas, owners and managers of businesses like Rent-A-Center, Conn’s, and Aaron’s report thousands of Texas citizens each year to local law enforcement. Once the police have completed an investigation (at the taxpayers' expense), they can arrest the customer and pass the file on to the local District Attorney's Office. At that point, the customer can be charged with a criminal offense (again at the taxpayers’ expense). Once charged, the customer-turned-criminal-defendant faces two basic options: (1) go to jail or (2) accept a lengthy and expensive probation that includes a requirement that you pay back the full value of the property to Rent-A-Center.

Last year, SM&F partner and McLennan County Criminal Defense Lawyers Association President @Jason Milam worked with reporter @Jay Root of the @Texas Tribune on a series of articles that focused on this “Rent-A-Center theft” issue in Waco and Texas. Jason testified last year in front of the Texas House of Representatives Committee on Business and Industry during their interim charge sessions. With the legislature now back in regular session, he was invited by the @Rep. Nicole Collier of Ft. Worth, Chair of the House Committee on Criminal Jurisprudence, to testify next Monday, March 11, at the Capitol in Austin regarding H.B. 1202, a bill authored by Rep. Collier that would exclude such rental-purchase agreements from prosecution under this particular law.

“Since I spoke to my first client charged with ‘Rent-A-Center theft,’ I’ve been determined to help fix this problem,” Jason said. “Debtor’s prisons have been outlawed in American for more than 200 years because the practice is unjust and harmful to society. The fact that these companies are using predatory tactics and taxpayer resources to pad their profits is outrageous. I’m glad the Legislature is now examining the misuse of this law, and I am happy to help by sharing my experience and the experience of dozens of my clients who have suffered from it.”

Unsurprisingly, Rent-A-Center and similar companies know that their profits are at stake and have sent their lobbyists to Austin to try to keep this criminal debt collection law alive. To those companies, we say this: if your business depends on using tricky laws and abusing the criminal justice system to make felons out of good people who just couldn’t pay a bill, then you don’t deserve to do business in our communities.

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