DEKALB COUNTY, Ga. — On its website, Purchasing Powers sells itself as a “better way to buy” luxury items.
The local company says it helps employers and organizations offer their employees a way to buy items like TVs, gold chains and even expensive purses over time with zero interest, no credit check and no hidden fees.
The voluntary benefit program is used by the state and two Georgia counties, but some question if it targets the poor.
The company lets employees with poor credit buy items they normally couldn't afford. The cost comes right out of their paycheck, usually over 12 months.
Channel 2's Sophia Choi started looking into the company after hearing complaints from some DeKalb county commissioners.
County employees told Choi they were sent a flier from the company that also used the official DeKalb County logo.
Now commissioners want to know how the company got their personal information.
“It is a feel-good benefit,” Purchasing Power Chief Operating Officer Elizabeth Halkos said about the company. “Some of the stories we hear from our consumers are, my spouse they were laid off and I’m the only breadwinner in the family and Purchasing Power was there for me."
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But Choi found there is a catch -- the items cost more. In some cases, a lot more.
Purchasing Power calculates a 13 percent increase on items. But an independent study by DeKalb County staff found it's sometimes much higher.
Out of 44 goods, 34 items were priced 50 percent or higher than retailers, the staff found.
“You are basically trading availability of credit or convenience for higher price of the product,” County Commissioner Jeff Rader said.
"The problem is when government does it and tells its employees this is a benefit for you, that's what's not OK because this is far from a benefit," Channel 2 consumer advisor Clark Howard said.
Choi spoke to three DeKalb County commissioners who said they received a flyer touting the goods sent to their home, just like every other DeKalb County employee.
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"The fact that this comes from the county, it sort of implies that it has a stamp of approval," DeKalb County Commissioner Kathy Gannon said.
"I did not know it was from an outside company. I thought it was program that the county had created on behalf of DeKalb County employees,” county employee Miriam Royal told Choi.
DeKalb and Fulton counties use Purchasing Power, along with the state.
State Sen. Steven Henson believes more vetting needed to be done before offering the program to employees.
“I have a concern that we are maybe not providing the best deals, but the employees might think that things have been vetted that they’re getting great deals because it a program through the state their employer,” Henson said.
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“There is that inherent belief that if it has gone through the process of the state that it should be good on the local level,” DeKalb County Commissioner Lorraine Cochran-Johnson said.
Purchasing Power says it gets very few complaints, but we found hundreds online.
“We have over 730,000 in 2018 and 96 percent of them, no issues. The remaining we resolved expeditiously,” Halkos said.
A government employee emailed Channel 2 saying she's used Purchasing Power multiple times and loves it. She also said she plans to use it again.
Halkos said Purchasing Power is a free program for counties that participate. But there is a cost for processing the payments.
“What are we putting into it? What kind of IT have we set up for people to do automatic deductions from people’s payroll? I mean there’s a lot of questions,” Gannon said.
Henson echoed that concern.
“I also have a concern that the state is helping kind of fund the mechanism the financing mechanism by doing payroll.”
Halkos responded to those concerns.
“Yes, the employer is administering many different things on behalf of the employee, but unlike all the other benefits out there, our program offers something that feels good for the employee,” she said.
While Halkos says it makes employees feel good, commissioners question if they'll feel the pain later.
“They’re aware of the decision they’re making and that it is a good alternative for them,” Halkos said.
“That old saying buyer beware, well make the buyer aware,” Cochran-Johnson said.
In DeKalb County, County CEO Michael Thurmond made the call to allow Purchasing Power access to employees.
Thurmond refused an on-camera interview with Channel 2 about this story saying he hasn't heard of a single complaint from his employees about Purchasing Power.
His office later sent this statement, saying:
"Purchasing Power is a voluntary program that was introduced to DeKalb County employees in November 2017. As of December 2018, 192 of 5,262 eligible employees, or 3.65 percent, were participating in the program and the county has received zero complaints.
"The county will conduct a formal survey to measure and understand overall employee satisfaction. Results of the survey will guide CEO Michael Thurmond’s decision whether or not to continue to offer Purchasing Power to employees beyond the current one-year term."
State Sen. John Albers, who carried a bill making this type of payroll deduction legal for public employees, told Channel 2 the bill was passed to help employees struggling after the recession.
One issue critics have with the company is that it does not help people build their credit score. None of the big three credit bureaus recognize payroll deduction payments when calculating credit scores.
When asked about why the prices of items are so high, the company said it has to pay the vendor right away, while waiting months for reimbursements.
Cox Media Group