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| Rent-to-buy credit sector 'morally bankrupt' | Rent-to-buy credit sector 'morally bankrupt' |
| (40 minutes later) | |
| Families on low incomes are being exploited by so-called rent-to-buy deals that charge more than double than High Street retailers, a children's charity has warned. | Families on low incomes are being exploited by so-called rent-to-buy deals that charge more than double than High Street retailers, a children's charity has warned. |
| Barnardo's said rent-to-own lenders should be forced to display the equivalent High Street price of the product and make interest rates clear. | Barnardo's said rent-to-own lenders should be forced to display the equivalent High Street price of the product and make interest rates clear. |
| It said the Office of Fair Trading must address the "morally bankrupt" market. | It said the Office of Fair Trading must address the "morally bankrupt" market. |
| The OFT said actions needed to force market change were beyond its remit. | The OFT said actions needed to force market change were beyond its remit. |
| Barnardo's said consumers were paying up to 150% more for some standard household appliances. | Barnardo's said consumers were paying up to 150% more for some standard household appliances. |
| It cited a three-year rental arrangement with a well-known weekly payment store that cost £1,074 for a fridge freezer, compared with a High Street price for the same product of £430. | It cited a three-year rental arrangement with a well-known weekly payment store that cost £1,074 for a fridge freezer, compared with a High Street price for the same product of £430. |
| Poverty push | Poverty push |
| "In these tough economic times, the most vulnerable families in society are being lured into an unaffordable debt trap by a morally-bankrupt lending industry," said Barnardo's chief executive Anne Marie Carrie. | "In these tough economic times, the most vulnerable families in society are being lured into an unaffordable debt trap by a morally-bankrupt lending industry," said Barnardo's chief executive Anne Marie Carrie. |
| She called on the OFT to protect families from being "unwittingly pushed further into poverty by compelling these unscrupulous lenders to make clear their extortionate rates". | She called on the OFT to protect families from being "unwittingly pushed further into poverty by compelling these unscrupulous lenders to make clear their extortionate rates". |
| However, one rent-to-own lender said its services allowed some consumers to buy products that may otherwise be too expensive. | However, one rent-to-own lender said its services allowed some consumers to buy products that may otherwise be too expensive. |
| "Brighthouse is a responsible lender," the company said in a statement. | "Brighthouse is a responsible lender," the company said in a statement. |
| "Our rent-to-buy model allows low-income families access to a range of products that they might not otherwise be able to afford." | "Our rent-to-buy model allows low-income families access to a range of products that they might not otherwise be able to afford." |
| Wider credit | Wider credit |
| The OFT said it had looked into the high-cost credit market in June 2010, and made a number of recommendations to the government. | The OFT said it had looked into the high-cost credit market in June 2010, and made a number of recommendations to the government. |
| However, it said these would have "limited effect" on the market. | However, it said these would have "limited effect" on the market. |
| The kinds of action needed to effect real change, such as intervening in the market to expand the availability of credit, were "outside of the OFT's remit". | The kinds of action needed to effect real change, such as intervening in the market to expand the availability of credit, were "outside of the OFT's remit". |
| In June last year, the OFT also looked at pawnbroking, payday loan and home credit businesses. It backed away from recommending price controls on expensive forms of short-term borrowing. | In June last year, the OFT also looked at pawnbroking, payday loan and home credit businesses. It backed away from recommending price controls on expensive forms of short-term borrowing. |
| It said although such borrowing was costly, it met a need for people who could not otherwise borrow cash. | It said although such borrowing was costly, it met a need for people who could not otherwise borrow cash. |
| Are you a family on a low income? Have you signed up to any rent-to-buy deals? Are you worried about your payment plans? Send us your comments and experiences. |