Upbound Group, a retail financing company that owns and operates several lease-to-own brands, has acquired Brigit, a cash-advance fintech that last month settled charges that it had
Upbound's brands include Rent-A-Center, which provides customers with furniture, appliances, electronics and computers on lease-to-own payment terms, and Acima Leasing, a technology company that offers lease-to-own options at the point of sale for thousands of retailers.
Brigit is one of multiple cash advance apps that operate on a subscription basis. Competitors include
Upbound CEO Mitch Fadel said Thursday that the Brigit acquisition enables the group to create "a financial solutions platform with Brigit as the backbone," thereby expanding the group's addressable market and enabling the company to operate across more product categories.
"The ability to add new products for our customers beyond lease-to-own is an important part of our strategy and now we can offer liquidity solutions, budgeting, credit building, financial literacy and savings," Fadel said in
Upbound and Brigit position the fintech as helping the financial health of its customers. Brigit co-founder and CEO Zuben Mathews said the acquisition "is a testament to our team's continued passion for helping the underserved and our dedication to innovation."
The co-founders, Mathews and Hamel Kothari, will continue to lead the Brigit team as a business segment of Upbound following the acquisition, according to the companies. Brigit will continue to operate under its existing branding and will retain its headquarters in New York City, which the companies expect to serve as one of Upbound's "innovation hubs," according to the press release about the acquisition.
FTC issued refunds to customers 'deceived' by Brigit marketing
Last month, the Federal Trade Commission issued a total of $17 million in refunds to just over 1 million Brigit consumers that the commission claimed were harmed by "false promises" of instant cash advances and "locked" into paying a monthly membership fee that they "couldn't cancel." The refunds followed a settlement reached last year between the FTC and Brigit over the claims.
An FTC complaint issued last year precipitated the refunds; it alleged that consumers could only access the promised $250 cash advance when they signed up for the $9.99-per-month subscription, that customers rarely secured advances of the full $250 and that in many cases consumers were not able to receive a cash advance at all.
The FTC also alleged that despite Brigit's promises that advances would be available with "free instant transfers," these consumers had to pay a 99-cent fee for the transfer to be instant. Consumers who did not pay the fee had to wait up to three business days for their advances.
The complaint cited examples of marketing from Brigit that promised access to $250 instantly but that made no mention of the $9.99 monthly subscription fee or the 99-cent instant transfer fee.
When the FTC issued the complaint against Brigit last year, the company
