Arfon MP Hywel Williams has urged the FCA (Financial Conduct Authority) to take action against controversial rent-to-own retailers which charge sky-high prices for high street goods, leaving some customers struggling with repayments.
Practices such as insisting people to take out expensive insurance packages when buying household goods such as fridge freezers and sofas are unacceptable.
A recent report by the All Party Parliamentary Group on Debt & Personal Finance revealed that more than a fifth of customers in arrears have goods repossessed by these firms. The report also found firms charging huge Annual Percentage Rates (APR) up to 94%, almost doubling the cost of household goods.
Hywel Williams MP said: “Personal debt in Wales has shot up by over 23% over the last year. Yet here we have rent-to-own firms continuing to cash-in on people’s financial misery.
“I’ve had a number of constituents telling me they have concerns about such firms trading on Bangor’s High Street.
“It’s the poorest people in society and those having difficulty getting loans who fall victim to these kind of dubious offers. People buy day to day items such as microwaves and washing machines and end up being charged inflated prices.
“People are drawn to these shops by seemingly low weekly payment plans, not really aware of what they’re signing up to. There are reports that customers are often urged to take out additional warranties, paying several times the true value of what they’ve bought. Some households simply can’t keep up with repayment plans and the goods are taken back to be sold on to new customers.
“It seems the poorer you are the more money you pay.
“I’ll be taking this issue up with the Financial Conduct Authority. They are the industry regulator. They have a duty to protect customers.”