A new parliamentary report has been published which supports the stance taken by Labour’s local candidate on rent-to-own schemes, accusing the schemes of ripping-off customers.
The All-Party Parliamentary Group on Debt & Personal Finance published its report this week saying that companies such as BrightHouse – which opened a new store in Weymouth at the end of last year – left customers “vulnerable to over-charging.”
Simon Bowkett, Labour’s candidate in the forthcoming General Election told us:
“Last December I was out in Weymouth talking to shoppers and warning them that shops like BrightHouse are not all they seem. I am delighted that this cross-party report fully supports what I have been saying. These shops are taking advantage of the cost of living crisis by offering big ticket items in smaller instalments but which – when added up – amount to a total price far above the market rate, sometimes equivalent to an interest rate of over 90%.”
In December 2014, the All-Party Parliamentary Group on Debt and Personal Finance took evidence on specific case studies and examples of rent-to-own schemes. It found that a Hotpoint tumble dryer on sale for £229 at Curry’s would cost BrightHouse customers £780 once interest, compulsory insurance and service cover costs were taken into account.
Similarly, a freezer that cost £644 at John Lewis including a five-year service plan, was being sold to BrightHouse customers for a total £1,716.
More recently, the Centre for Responsible Credit found that the cheapest washing machine available at BrightHouse cost a total of £1,092, from a base “cash” price of £569, while the same machine was £295 from Co-op Electricals.
Mr Bowkett said, “I fully support the Committee’s conclusions that there needs to be immediate action to warn customers of the full costs of these schemes, and to ban their hidden pitfalls such as compulsory insurance on purchases. I work daily for a charity that sees people who have become trapped in debt, and if I am elected in May I will be doing all I can to ensure that these sort of businesses are not making profit at the expense of vulnerable people who can least afford to lose what little they have.”
