Sherwood and Newark Citizens Advice was very pleased to learn of the FCA’s recent announcement that it will cap the cost of rent-to-own goods from 1st April 2019, which will help local people struggling with repayments. Jackie Insley, Chief Officer, said: “This cap, which the service has campaigned for, is a win for those struggling with the runaway costs of rent-to-own agreements.
We’re delighted it will now be introduced as we see the massive harm caused by the crippling interest rates when local people come to us for help. The cap will stop people from paying over the odds compared to similar products on the high street and falling into further debt when costs spiral out of control.”
Rent-to-own companies sell household items, such as appliances, furniture and electronics, through ‘hire purchase agreements’. These agreements — usually arranged over three years — involve customers paying off the price of the product as well as interest, in weekly payments. The agreements allow people on low incomes to purchase goods that they cannot afford to pay for upfront. But these goods come at a high cost. Interest rates can be as high as 99.9%, and missed payments are subject to fees of £10.00 to £12.00 per occasion. More generally, rent-to-own goods are a bad deal — with high markups on prices, costly delivery charges, and expensive add-ons, such as aftercare and insurance.
Citizens Advice research found that affordability checks by sellers often do not identify where consumers might face financial difficulties in meeting the cost. In particular, other expenditure is overlooked. As a consequence, rent-to-own goods often exacerbate existing financial difficulties.
Anyone requiring advice or support can get help online at www.citizensadvice.org.uk or from Citizens Advice Sherwood and Newark Open Door Advice Sessions held at:
5 Forest Court, New Ollerton NG22 9PL
Monday and Wednesday: 9.30am to 2.30pm
Telephone Advice Line: 0344 411 1444 (Monday to Friday 10.00am to 4.00pm).
Or Call Citizens Advice Consumer Helpline on 03454 04 05 06
Or see Twitter: @ShwdNwkCAB