Former Labour leader Ed Miliband has teamed up with the credit union organisation to launch a campaign to tackle “rip-off” rent to own stores amid concerns they are overcharging customers for household goods.
The Doncaster North MP said he wanted to put an end to the “Great British rip-off” and claimed a number of specialist stores are enticing customers in with cheap weekly repayments for certain goods but the total price ends up running into thousands of pounds.
Mr Miliband said a number of rent to own stores are overcharging customers for items such as TVs, settees and fridge freezers.
He explained how a number of constituents have told how they have been paying low amounts per week for goods, only to later realise they owe thousands of pounds for the items over a period of years.
The politician highlighted how many ‘rent to own’ firms are failing to make their customers fully clear on how much they will owe by burying it in the small print.
Mr Miliband called a press conference at the South Yorkshire Credit Union base in Mexborough earlier today to raise his concerns over the issue.
He said: “This is a Great British rip-off. There is a lot of people out there that get into debt and it can cause people untold misery.
“These companies make hundreds of millions of pounds off the back off people in Mexborough and other areas.
“I am not willing to let people suffer and be ripped off. We want a fair deal for people.”
He urged members of the public to use an alternative “fairer” system set up by the credit union, which has recently launched its own store in Mexborough selling household goods.
The credit union said they had found one store selling a three seater sofa for a total price of more than £2000, which involved paying £13 a week over three years. The organisation said the same item sold through the credit union would cost just over £600.
Gary Simpson, head of development for South Yorkshire Credit Union, said many rent to own stores impose high levels of annual percentage rate (APR), which ramps up the price.
He said: “What these companies essentially do is they fail to complete the sentence.
“They say ‘its great, you pay so much off per week’, but then they don’t say ‘but it will cost you £3000 or whatever by the end of it.’“
Mr Miliband said Labour party and credit union members would be handing out leaflets to raise the issue in Mexborough tomorrow.
He added that he would write to the government to raise his concerns.