Charity calls for more regulation on the nation’s lenders

One charity has come out in favour of more governmental regulation on the nation’s short term loans providers and other lenders after a recent research study that 20 per cent of low income earning households in the UK could be spending as much as 30 per cent of their income on debt repayments.

Charity Barnardo’s says that some payday advance lenders may be exploiting poorer British households, and that some providers of credit that run rent-to-own schemes charge individuals substantially more to purchase appliances for their household over time than it would cost to purchase the same items outright on the high street.  Anne Marie Carrie, chief executive for Barnardo’s, remarked that the lending industry was ‘morally bankrupt’ for luring society’s vulnerable families into the trap of unaffordable debt.

The charity’s new report exhorted the Office of Fair Trading to institute more stringent regulations regarding lenders running rent-to-own schemes.  The OFT needs to compel these providers of quick loans to display sale prices equivalent to high street prices on their merchandise, Barnardo’s insisted.

The charity also stated that the Government needs to take greater steps to make sure the nation’s low income earning families have greater access to traditional finance in order to rely on loan sharks or rent-to-own schemes.  Barnardo’s argued that these poorer households need to be encouraged to save up for essential goods and services instead of borrowing to pay for them.

One particularly damning example of this exploitative behaviour on the part of rent-to-own companies, said Barnardo’s, was a £430 Beko fridge-freezer available in Comet would cost £1,074 if purchased from BrightHouse, a rent-to-own company, over a payment scheme of three years.

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