PC hardware manufacturer NZXT and its billing partner, Fragyl, have agreed to a $3.45 million settlement to resolve a class-action lawsuit regarding the company's Flex PC rental program. The settlement addresses allegations that the companies engaged in deceptive business practices and misrepresentations.
The lawsuit, filed in the U.S. District Court for the Northern District of California, accused NZXT and Fragile of conspiring to "defraud consumers through gross misrepresentations and illegal business practices." Plaintiffs alleged the companies utilized a "bait-and-switch" tactic to lure customers into the rental scheme.
NZXT launched the Flex program in August 2024, offering monthly desktop rentals ranging from $59 to $169. The program faced immediate scrutiny after hardware investigators at Gamers Nexus reported that customers received components weaker than advertised and that the company used inaccurate benchmarks in its marketing.
Allegations of deceptive marketing
Beyond hardware discrepancies, the litigation raised concerns regarding data privacy and the transparency of the subscription model. The complaint alleged that the companies misrepresented the specific components and attributes of the rental units provided to subscribers.
NZXT CEO Johnny Hou previously addressed these criticisms, stating the company would rectify issues with the Flex program. In a company blog post, NZXT pledged to remove "unclear messaging" from its website and clarify that the service is a rental program rather than a rent-to-own model.
Hou also denied allegations regarding user privacy, telling customers that NZXT is "not in the business of selling your data." The company noted that hardware specifications sometimes changed in real-time due to supply chain availability.
The settlement resolves the claims brought by three customers who sought class-action certification in August 2025. The agreement allows affected users to retain their current rental units as part of the resolution.
