A nationwide campaign to tackle the cost of rent-to-own stores who allegedly charge thousands of pounds for household goods has been launched in Doncaster.
Former labour leader Ed Miliband has teamed up with the credit union organisation for the campaign and said he wanted to put an end to what he described as ‘the Great British rip-off.’
The Doncaster North MP claimed a number of specialist stores are enticing customers in with cheap weekly repayments for goods like TVs, settees and fridge freezers - only for the total price to run into thousands of pounds over a number of years. He explained how a number of constituents have told how they think many rent-to-own stores are failing to make their customers fully clear on how much they will owe by ‘burying it in the small print’.
At the campaign launch, held at the South Yorkshire Credit Union base in Mexborough, Mr Miliband said: “This is a Great British rip-off. There are a lot of people out there that get into debt and it can cause people untold misery.”
Couple Lee Machin, aged 44, and Maureen Jones, aged 39, of Wath, claimed goods including a freezer, TV and settee set them back around £2, 500 from rent-to-own store BrightHouse. Maureen said: “There are lots of different figures and small print but the end figure you need was hard to come by.”
Mr Miliband urged customers to use an alternative system offering ‘better value’ set up by the credit union, which has recently launched its own ‘My Living’ store in Mexborough selling household goods. The credit union said they had found one store selling a three seater sofa for more than £2000, which involved paying £13 a week over three years.
The All Party Parliamentary Group on Debt and Personal Finance last year published a report of its inquiry into the rent-to-own (RTO) sector, which concluded that the Financial Conduct Authority should investigate overcharging and do more to protect customers.
Chair of the APPG Yvonne Fovargue MP said of the report: “Rent to own stores like BrightHouse charge inflated prices to some of the poorest people in the country. Customers are often obliged to take out additional warranties and insurance, as a result paying several times the true value of the goods.”
In a statement, BrightHouse claimed the APPG ‘did not conclude that we have been overcharging customers’ and the company is ‘constantly exploring ways to make our offer to customers even more transparent and competitive.’
The company added that their prices ‘have always been clearly displayed and explained to each customer in store’ and ‘last year we also added a breakdown of the cost of the individual elements of our service package on our price tickets and website.’
The statement went on to say their records show the two customers mentioned in the Free Press coverage ‘have never made a complaint to BrightHouse.’
A spokesperson added: “BrightHouse is proud to serve low income customers, an under-served and often misunderstood group. We provide our customers with a straightforward agreement with transparent pricing. This allows them to pay in affordable instalments, usually weekly and spread over three years.
“We offer a fair and competitive service to our family-centric customers. They are savvy shoppers who understand the value of money and take exception to being patronised.
“We are proud that our customers do not hesitate to recommend BrightHouse to friends and families.
“Every time a customer takes out an agreement with BrightHouse we spend time talking face-to-face, to ensure that the agreement is right for them. Knowing that the weekly payment is fixed, over an agreed period with service included, gives customers peace of mind. If the product breaks down during the life of the agreement, BrightHouse will fix it, or if not replace it, free of charge. One of the significant advantages of rent-to-own, and one we know our customers like, is that there is no long-term obligation. The customer can cancel the agreement and return the product at any time.”