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Hundreds of thousands of customers who buy household goods through rent-to-own schemes are being "ripped off", a group of MPs has concluded.
It said some of the poorest people in the UK are being charged interest rates of up to 94% a year to buy TVs or washing machines. The All Party Parliamentary Group on Debt and Personal Finance now wants the regulator to take action. BrightHouse, the largest company, said it was disappointed by the report. Under the rent-to-own model, consumers take out an agreement to buy a product, and then pay weekly instalments until they own it - similar to a hire purchase agreement. But usually customers have to take out compulsory insurance and warrantees, which can double the eventual cost. The MPs said that such insurance may have been mis-sold - especially where people already had household cover....Read more here
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Under the rent-to-own model, customers take out an agreement to buy a product, and then pay weekly instalments until they own it - similar to hire purchase agreements. Hull city council's trading standards team launched an investigation into PerfectHome after a customer complained that she had been pressured into giving her house key to them before they delivered her television.....Read more here