THURROCK MP Jackie Doyle-Price has questioned the “pricing arrangements” of a shop in Grays during a debate on consumer credit and debt management from the floor of the House of Commons.
Ms Doyle-Price said:
“I wish to draw attention to one particular organisation, a company called BrightHouse. There is a branch on High Street in Grays, and I thought I would do a bit of price comparison.
“At the moment, it is advertising a nice, attractive 46-inch LED television that currently retails at £849 in Currys. BrightHouse is retailing it at £1,478.11, but it quotes a weekly payment of £13.64. On the face of it that sounds affordable, but ultimately the customer will pay a total of £2,127.84 for the product, two and a half times the price that they would pay in a normal high street store.
“That is why we need to consider extending affordable credit provisions more widely, so that consumers are not ripped off by such companies.
“It is important that we consider the whole issue of indebtedness, which has become a plague on our country and will only get worse as time moves on.
“We all want appropriate measures in place to protect those who rely on credit from the activities of unscrupulous lenders.
“I bring some knowledge to this subject, having worked in a previous life as an adviser to the Financial Services Consumer Panel. We have long been concerned about the inadequacy of the current framework of consumer credit regulation, so now is clearly the appropriate time for change.
“We should leave no stone unturned in ensuring that the regulator has the appropriate tools and, more importantly, the appetite to take enforcement action where poor practice is identified.
“At the moment, we have a consumer credit system regulated by the OFT, in which the tools available are not very effective. With the reforms to the tripartite system, we have a great opportunity to state that we expect the new authority to take real action. In the past there has been a lot of, “Oh dear, isn’t this terrible?” and a lot of wringing of hands from regulators, but they have had no real ability to stop poor providers doing business or to give them appropriate penalties. That is what we want to see from the reform of the regulatory system.
“One reason why many consumers find themselves in punitive agreements is that often, deals are marketed in terms of the cost per week, so they do not necessarily understand exactly how much they will pay for their credit.
“That practice is not just restricted to doorstep lenders and loan sharks, because all too often we see it on our high streets.
“I pay tribute to my local borough council, which has welcomed Essex Savers credit union into its civic offices and other properties that it owns and manages. I encourage the Government to consider what facilities it could offer to credit unions-post offices were mentioned, but we could also use jobcentres. That would give credit unions access to more savings, and they would therefore be able to make more loans.”
this is typical example of how it’s harder for people to get out of debt/credit trap these days.
i’m not talking about tellys or games machines i’m talking about beds ect things people need and from these stores they pay far more than they would if they went to a normal store but they can’t get credit from a normal store or afford to save up to buy them so end up using stores like these or doorstep lenders and pay the high price for it .
i hope the thurrock credit union takes off so these stores and doorstep lender can become a thing of the past .
i was lucky and escaped the spiral of debt from doorstep lenders but i can understand how easy it can be to get trapped in the system especially when your on low income and need beds for your children ect .
the ironic thing is if you earn good money you can get loans on cheaper rates than if your on low incomes ect.
Brighthouse and places like these are praying on the low payed, the are nothing short of legalised loan sharks and should be treated as such.
The total cost of the product mentioned is almost 3 times the standard price, people need to be made very aware of the total cost of ownership when purchasing these items on a weekly payment plan.
People also need to be aware of these “payday loans” that are now being advertised on TV, the interest rate on the majority of them is over 1700% APR.
It seem that whenever we are hit with cuts these money grabbers come out to offer what looks like a good deal but the underlying cots are exorbitant.
I thouroughly agree with you Lambo .
Most people understand they are paying well over the odds with these loans ect however they feel they have no other choice cos normal lenders ect won’t touch them and they are trapped in the system having been there myself i fully understand the situation .
I couldn’t agree more with the comments above. People on low incomes/benefits find it difficult to obtain credit without going through these well over priced money lenders!.
These’s a a way forward for the people of Thurrock now and thats to join the Essex Savers and put some money aside and when needed then you will be able to obtain a loan on a competative rate that banks are charging. This will only be a small loan but would cover the cost of normal living things for example Bed, Tv, Cooker etc.
grays88 i like the idea of that organisation and wish more people were aware of that and other organisations like it suc as the credit union thats starting up.
What i would say though is it’s easy to sit here and say save up a little each week however it can be quite difficult and one of the strange anomolies that happen wen yyou try and save up but things “keep poping up”so you end up using any spare money but when you need a new bed for your children that tenner a week you was trying to save up but couldn’t now apears to be there ready for the use of paying these people back.
And yes when you look at it you say to yourself “why didn’t i save it up myself instead of this”the reality especially when you got children that someting allways pops up wether it’s a school trip or new bit of school uniform ect .