Susan Elan Jones MP has slammed what rent-to-own retailers are legally allowed to charge for basic household items as “totally immoral”.
The Clwyd South Labour MP who is a member of the Debt and Personal Finance All Party Parliamentary Group is calling on the UK Government to bring in much tougher regulation to tackle the amount that rent-to-own retailers like Bright House are allowed to charge.
In her first term in Parliament, the Clwyd South Labour MP was part of a successful cross-party campaign that saw financial caps imposed on payday lenders.
Susan Elan Jones MP said:
“A lot was done to toughen the rules and regulations around Pay Day loans a few years ago. Intensive campaigning meant that from 2 January 2015, there’s been an interest cap on payday loans of 0.8% per day and no borrower should have to pay back more than twice what they have borrowed. This is something the Financial Conduct Authority has enforced strictly and the changes were much-needed.
“However the same does not apply when it comes to stores like Bright House and other rent-to-own outlets.
“As far as I can see, the current set-up just takes advantage of people who have little or no savings, and are forced to pay by installments. It just isn’t right.
“Take for instance how much you would have to pay for a Beko Double Oven electric cooker. You can currently buy one of these from Tesco Direct for £239
“However, with Bright House if you needed to spread payment over 3 years, with installation and delivery, you’d have to pay £858. Even if you paid for it over a year, you’d still be talking about £553.28 – a huge difference from what ordinary stores charge
“A recent report by the End Child Poverty coalition is calling on the Government to back more effective regulation of rent-to-own while also improving access to interest-free credit from the State. These are the sort of practical, cost-effective ideas that I and others would like to see implemented – and we will continue to campaign on this issue.”