Struggling families taking out deals on “rent-to-buy” household goods can end up paying out more than double the prices offered by high street retailers, a report from Barnardo’s has found.
The children’s charity voiced “strong concerns” about the rent-to-own credit sector and said companies should be compelled to display the average internet and high street price of the product they are providing.
This should include the initial product price and optional service cover, the report titled A Vicious Cycle: The Heavy Burden Of Credit On Low Income Families, said.
The report argued that some rent-to-own credit providers make comparisons difficult by not consistently providing the manufacturer model numbers of items.
Researchers looked at the cost of a Beko washing machine, finding the total amount payable spiralled to £1,250 when purchased from an unnamed rent-to-own company, compared with £470 when bought from a high street seller.
The list price of the rent-to-own washing machine was more than £150 more expensive than the high street one in the first place, and included £215 interest paid over three years as well as two years worth of service cover costing £382.
On the high street, three years of cover cost just £130 by comparison, the report found.
Barnardo’s also highlighted a Beko fridge freezer which cost £319.99 at Comet but £606.84 at weekly payment store BrightHouse, when the initial cash price of £421.54 was paid off over 156 weeks.
BrightHouse pointed out that its services enable families to buy items they might otherwise find beyond their reach and said it is a responsible lender.