On December 23, 2025, the New York Attorney General (AG) announced a settlement with Monterey Finance (Monterey) of approximately $2.4 million in debt relief for 835 New York consumers and $175,000 in penalties. The AG alleged that Monterey disguised high-cost lease agreements as traditional consumer financing, causing consumers to pay more than the sticker price for goods and services they believed they were purchasing.
Specifically, Monterey allegedly partnered with merchants to offer point-of-sale “financing” that was lease-to-own, layering on fees at the beginning and end of the term and “pay-to-pay” fees on monthly payments, with total costs sometimes exceeding 200 percent of the original price. Monterey allegedly misled consumers into believing they owned the goods (including pets and wedding dresses), purportedly used aggressive collection tactics, and serviced leases for services and other items with no residual value, while not allowing returns.
Under the settlement, Monterey agreed to cease collecting on any debt arising from its leases (erasing approximately $2.4 million in debt), cancel all outstanding New York leases, and pay $175,000 in penalties. Monterey also agreed to the request that consumer reporting agencies remove negative credit information tied to these leases and is barred from lease arrangements involving services, pets, and other goods with no clear resale value.
Why It Matters
The AG characterized this action as part of a broader crackdown on predatory and deceptive rent-to-own practices, especially where consumers may not understand they are entering into leases or the true total cost of the transaction. Companies offering or facilitating point-of-sale “financing” and lease-to-own products should expect scrutiny of whether ownership terms, fees, and total costs are clearly and conspicuously disclosed.
