INVESTIGATION INTO ‘RENT TO OWN’ SHOPS WELCOMED
The proposed investigation of ‘rent to own’ shops has been welcomed by local MEP Louise Bours.
A high profile group of MPs – the All Party Parliamentary Group on Personal Finance – is to investigate shops that sell furniture, fridges, TVs, washing machines and other electrical items and take payment in weekly instalments.
“Many people are able to buy outright or by using a credit card but others are not able to do so and struggle to make ends meet. Buying such large items by paying on a weekly basis is the only way they can afford to get them,” said Ms Bours.
“What concerns me, and has done for some time, is the extortionate interest rates charged by some of these companies. They fall into the same league as pay day loan companies and unfortunately it is the most vulnerable in society who use them.
“The danger is they may just see the product price and weekly payment figure and work out if they can afford that without really considering the final figure including interest.
“Having looked into this I know that one particular store, and I’m sure it’s not unique, charges as much as 94.7% interest. So for example a touchscreen laptop costing £867 at £15 a week over 104 weeks ends up costing a massive £1,560.
“And a dryer costing £9 a week over 156 weeks and costing £731 actually works out at £1,404 at an APR of 64.7%.”
“UKIP wants to encourage business growth and is against heavy handed legislation but these companies must not be allowed to take advantage of they vulnerability,” said Ms Bours.
“That is why I am glad that parliamentary group is turning its attention to this particular market and I hope it will result in a ceiling being introduced on interest charges,” she added
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