Security Deposit Alternative Lawsuits: Rhino, Jetty, LeaseLock, Obligo, and Renters' Rights

A security deposit alternative is a third-party product a tenant buys so they can move in without paying a traditional refundable deposit. The pitch is lower upfront cost. The catch is that the fees are usually nonrefundable, and the tenant typically remains responsible for damage or unpaid rent claims.

According to a May 20, 2026 report by the National Consumer Law Center (NCLC), the products work in three main ways:

• Direct billing authorization: the tenant pays a nonrefundable fee and authorizes the company to charge their bank account or card up to a cap if the landlord makes a claim. NCLC identified Obligo as using this model and said it does not require proof of the landlord's claim before billing.
• Insurance: the policy insures the landlord, not the tenant, even though the tenant pays the premiums, and the company can pursue the tenant for claims it pays through subrogation.
• Surety bond: the company pays the landlord and then seeks repayment of the full amount from the tenant, on top of the premiums already paid.

NCLC found that in all three models the landlord can still pursue the tenant for damages above the product's cap. The central legal questions are whether nonrefundable fees, landlords requiring the products, and marketing that does not explain the cost or limits are lawful, and whether renters lost the protections state deposit laws provide.

No filed class action yet

As of September 2026, we found no class action lawsuit filed against Rhino, Jetty, LeaseLock, Obligo, or similar companies over these products. Tenant complaints collected by consumer advocates are often the step before lawsuits, but until a case is filed there is nothing to join, no class, and no settlement. See what a lawsuit investigation is.

Maryland's LeaseLock settlement

On January 24, 2022, Maryland Attorney General Brian E. Frosh announced a settlement resolving claims that LeaseLock's deposit waiver products violated the Maryland Security Deposit Law. LeaseLock agreed to return monthly payments that landlords collected from Maryland tenants, except where claims were made for unpaid rent or damages beyond ordinary wear and tear. It remains the clearest example of a regulator treating a deposit alternative as subject to deposit law.

The 2026 NCLC report

NCLC's report, Tenant Insecurity, collected product terms and tenant complaints and listed issues including nonrefundable fees, landlords requiring use, misleading marketing, overdrawn bank accounts, no proof of claims, price increases, and tenants paying for both a deposit and an alternative. It recommended that states enforce existing laws, bar landlords from requiring a specific product, and require documentation before tenants are billed.

These figures come from company marketing and examples compiled by NCLC. The key difference is that a deposit comes back if you leave the unit in good shape, but fees do not. One tenant quoted by NCLC said they had paid Jetty more than the $600 deposit it replaced before even moving out. Another said Rhino claimed $3,400 for wear and tear after they had already paid $1,600 in fees.

A deposit alternative only saves money if you would have lost most of a regular deposit anyway, or if you move out quickly; over a long tenancy, monthly fees can exceed the deposit they replace.

Rules on these products are a patchwork, and some local laws actually push landlords to offer them.

• Maryland: the attorney general treated LeaseLock's deposit waiver as subject to the state's Security Deposit Law and required refunds in 2022.
• Atlanta: under Atlanta Code section 94-152(a), on a tenant's request, landlords who own or control more than ten units and require a deposit of more than 60% of monthly rent must offer to accept one of two options in lieu of the deposit, one of which is rental security insurance.
• Cincinnati: under Cincinnati Municipal Code section 871-9(8), on a tenant's request, landlords with more than 25 units that require a deposit must offer at least one alternative option.
• Massachusetts: state law lets the housing office adopt regulations allowing a fee in lieu of a security deposit if the landlord and tenant agree.

Notice the difference: these local rules give the tenant the choice. Problems tend to arise when the landlord makes the product mandatory. NCLC recommends that states require landlords to accept traditional deposits, cap deposits at no more than one month's rent, and allow deposits to be paid in installments, so that renters are not steered into nonrefundable fees.

If your city or state lets you choose, ask the landlord in writing to accept a traditional deposit, and keep their answer. A written refusal can be useful later.

You may have a claim, or be the kind of renter a future case would cover, if:

• Your landlord required you to use a particular deposit alternative, or charged a deposit and a product fee.
• You were not told the fees were nonrefundable or that you would still owe for damages.
• The company billed you or withdrew money for a landlord claim you disputed, without documentation.
• Your fees went up during the lease.

You also may have rights under your state's security deposit law even without a class action. Many states limit deposit amounts, bar deductions for normal wear and tear, require itemized statements, and let tenants sue for penalties, often in small claims court. Whether those rules apply to a deposit alternative depends on the product and your state, as the Maryland LeaseLock settlement shows.

Timing matters too. If you are still in the lease, you may be able to stop future monthly fees by paying a traditional deposit instead, depending on your lease and the product terms, so ask.

You probably do not have a claim just because you chose an alternative voluntarily, understood the fee was nonrefundable, and never had a claim filed against you.

• State security deposit laws: most states regulate deposits, including caps, return deadlines, itemized deductions, and damages for violations. The argument in Maryland was that a deposit waiver product was subject to those rules.
• State consumer protection laws: bar deceptive marketing, such as calling a product "insurance" for the tenant when it protects the landlord.
• Debt collection laws: when a company pursues a tenant for a landlord's claim, the federal Fair Debt Collection Practices Act may apply to third-party collectors, and it bars collecting amounts not owed. See our FDCPA guide.
• Insurance and surety regulation: state insurance departments license these products and can take complaints.

Many product terms include an arbitration clause or a class action waiver, and NCLC urged states to ban them in these contracts. Those clauses are one reason cases may be slow to reach court.

Deadlines to keep in mind

There is no claim deadline, because there is no case or settlement. Your own claims have time limits set by state law: security deposit claims, consumer protection claims, and contract disputes each have their own statute of limitations, often from one to several years. If a company is billing you now for a move-out claim, respond in writing quickly; waiting can make disputes harder.

Keep records for the full length of your tenancy and at least a few years after, since fee and billing disputes can surface long after you move out.

The most common fight happens after move-out, when the landlord files a claim and the company bills the tenant. NCLC documented tenants billed for amounts they disputed, landlords filing claims larger than what was owed, and bank accounts overdrawn by automatic withdrawals. Here is how to respond.

1. Ask for the claim in writing, with an itemized list of charges, photos, invoices, and the move-in inspection report. You are entitled to know what you are being charged for.
2. Compare it with your own evidence. Move-in and move-out photos, the move-in checklist, and messages about repairs are the core of any dispute. Normal wear and tear, like faded paint or light carpet wear, is generally not chargeable under state deposit laws.
3. Dispute in writing with both the company and the landlord, and keep copies. If the company is collecting on the landlord's behalf, a written dispute can trigger rights under federal debt collection law.
4. Protect your bank account. If you signed a direct billing authorization and believe a withdrawal is improper, contact your bank promptly about disputing it and ask whether you can revoke the authorization going forward.
5. Complain to regulators. Your state attorney general, your state insurance department (for insurance and surety products), and the Consumer Financial Protection Bureau accept complaints.
6. Consider small claims court against the landlord for improper charges, which is how most deposit disputes are resolved.

If a collection agency later contacts you about the balance, our page on debt collection harassment explains your rights, and our guide on how to sue a company covers small claims basics.

1. Download your lease and the product terms, and save marketing pages or emails you saw at signup.
2. Total your fees from bank or card statements.
3. Dispute any damage claim in writing, ask for itemized documentation and photos, and send your own move-out photos.
4. Check your state's deposit law and file complaints with your state attorney general and insurance department if the company will not respond.
5. Watch your bank account if you signed a direct billing authorization, and contact your bank about unauthorized withdrawals.

If you were required to buy one of these products, or were billed for damages you dispute, independent attorneys who handle tenant and consumer cases can review your documents. A free case review takes about two minutes. For other rental cost claims, see our RealPage rent price-fixing page.