Hire purchase deals on white goods 'leave struggling families out of pocket'

Costly: People are paying over the odds for white goods
Rashid Razaq15 March 2016

Struggling households are paying three times more for items such as washing machines and cookers under hire purchase deals because they cannot afford to buy them outright.

More than 400,000 families are being penalised for taking out so called rent-to-own contracts in a sector which has increased by 131 per cent since the 2008 recession.

The Financial Inclusion Centre (FIC), a not-for-profit think tank, said typical customers were young, single mothers living in rented accommodation and wholly or partially reliant on welfare benefits.

Hire purchase companies have mushroomed since 2008 with almost 400 stores nationwide, an increase of 140 per cent.

Gareth Evans, director of the FIC, said: “These firms continue to litter the high streets of our most deprived towns and cities, making hundreds of millions of pounds of profits from the growing numbers that don’t have any other options but to pay a poverty premium when borrowing.

“It’s not just the huge costs, but most customers are also required to take out expensive warranties and insurances that they don’t want or need and worrying numbers struggle to keep up with repayments resulting in the goods being reposed.”

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