Late Payments and Confusion: One Startup’s Struggle to Make Rent Easier

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As it sought an automated solution, Flex employed an army of temps to manually pay some customers’ rent.

Like many households over the past year, Jose and his family were being squeezed by rising costs. “Everything is going up,” he said. “The food. The cost of day care.” To free up space in their budget, they turned to a company promoted by their apartment complex: Flex. A booming tech startup based in New York City, Flex says it helps consumers “improve cash flow” by splitting their monthly rent into two manageable installments instead of a single, larger payment.

The process was supposed to be simple. Flex offers to pay its customers’ rent—in full—directly to the landlord. For their part, customers pay their rent to Flex in two installments, one due at the beginning of the month and one later in the month. In essence, Flex promises to front a big chunk of the rent, allowing families to spread out one of their largest expenses.

To Jose, this sounded like a good deal. “It was pretty much beyond convenient to split our rent,” he said. “That’s the reason why we used Flex—to make sure we can cover day care and have food in our house.”

But by August, what had started as a lifeline turned into a source of significant financial stress, after Flex issued confusing instructions. At the time, Jose said, his wife was set to receive a direct deposit on the fifth day of the month. The rent was due to their landlord company two days earlier, on the third of the month. But Jose said he was under the impression that Flex would pay the rent so long as funds were available in the family’s account by the fifth.

Jose’s belief was reinforced by a text message from Flex that said, “Please make sure you have funds available for your first payment of $585.25 by the 5th* in order for Flex to help you cover this month’s rent payment.” That message was accompanied by a perplexing caveat: “*disclaimer: if Flex has sent you a specific email stating a different deadline for payment, that email takes precedence.”

It’s unclear if Jose or his wife ever received such an email or why Flex would send that text message to anyone whose payment was actually due before the 5th. Flex’s website at the time left the due date ambiguous, stating that funds to cover the first half customers’ rent “must be available by 1pm EST on the 5th” but that “if you have been notified, you may be required to make the initial payment by the 3rd.”

It soon became apparent that Jose was indeed expected to pay Flex by the 3rd and that, as a result, Flex had not paid his rent. On August 4, Jose and his wife received a letter from their apartment complex informing them that because the rent was past due, they now owed a $50 late fee. The letter threatened the family with eviction if they did not come up with the funds. “If payment is not made as requested, demand is hereby made for you to voluntarily vacate the apartment and return possession to the owner or its agent,” it said.

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