A 2009 commercial for Rent-A-Center.
The company’s high-fee rent-to-own stores, mostly in low-income areas, have drawn the ire of multiple states’ attorneys general. Ed Mierzwinski, federal Consumer Program Director for U.S. PIRG, says that “They promise the American dream of ownership and then they take it away with a cruel contract. They are selling something over time at triple-digit interest rates but they want you to think you’re renting it and it’s almost free.” Gary Rivlin, author of Broke, USA: From Pawnshops to Poverty, Inc., is equally skeptical: “The brilliance of rent-to-own is they figured out how to sell a person a TV for $1,500 that would cost something like $600 with a credit card. Really, Magic? I loved you, I rooted for you, and that’s what you’re lending your name to?”
6. A partnership, beginning in 2003, with now-defunct Washington Mutual.
The deal was to open a chain of home loan centers in underserved communities and the stated purpose of those locations was to promote prime borrowing, but ultimately, Washington Mutual was bankrupted by subprime exposure, and the Johnson-affiliated loan offices all closed.
7. A prepaid, Magic-branded credit card.
The Kardashians were widely criticized for using their names to sell prepaid debit cards with unnecessarily high fees, and Magic Johnson has one, too. But few have noticed, with the exception of a few personal finance blogs. “At the end of the day, cost and convenience, not branding, should be a prospective prepaid card user’s biggest concerns,” Odysseas Papadimitriou of CardHub.com wrote of the card. “The MAGIC Card leaves something to be desired on both fronts.”
(Magic Johnson Enterprises declined to provide anyone who would comment on any of Johnson’s forays into financial services.)