Tomorrow the city watchdog, The Financial Conduct Authority (FCA), is expected to reveal plans to cap the amount that these rent-to-own firms can charge in interest.
In March, The Sun launched our Stop The Credit Rip-Off campaign to help millions of families who fall prey to doorstep lenders and rent-to-own firms.
We want firms to stop charging customers more than double what they've borrowed.
Weekly payment stores – such as BrightHouse and PerfectHome – charge customers small amounts each week, from just £3.50, but customers often end up paying back up to three times more than an item is worth.
Today, we reveal how expensive their Black Friday "sales" are, as experts warn that the FCA must urgently introduce a cap to stop companies that "take advantage of those who can least afford it".
BrightHouse's Black Friday sale promises customers its “best deals ever” – but its PS4 bundle with FIFA 19 & Assassins Creed cost more than THREE times more than buying exactly the same product from Curry's.
While PerfectHome charges £622 for an Elextra 8kg washing machine – more than three times the cost at AO.com, where the same model is £199.
The Sun looked at the price of three items from each weekly payment store.
We included fees, such as delivery and installation, and compared the total price to the cheapest on the high street.
In most cases we chose high street products where delivery was free or shoppers could collect the item in store without paying a charge.
The repayment lengths differ from 80 weeks up to 156 weeks.
Customers can choose to pay shorter payment plans and this does reduce the cost of the product but also increases their weekly repayment.
In total, on all of the six items customers would end up paying back more than double what they had originally borrowed, compared to the high street cost.
Over 400,000 people use rent-to-own firms every year, according to figures by the FCA.
In May, the city watchdog, the FCA, announced plans to crackdown on "exceptionally high" rent-to-own products, as well as a raft of changes to overdrafts and stricter rules for doorstep lenders.
Consumer rights expert James Daley, of Fairer Finance, told The Sun: "Rent to own is an incredibly expensive way of buying household goods – and these high rates often take advantage of those who can least afford it."
Gillian Guy, chief executive of Citizens Advice, said: “People who buy household items using rent-to-own pay huge amounts of interest on products that already cost well over the regular retail price.
“Alongside extras, such as warranties and delivery charges, these agreements can lead to runaway costs that can cause people real financial harm.
“This is why the FCA must act soon and confirm its intention to cap rent-to-own agreements. No one should have to pay back more than double what they borrow.”
Peter Tutton, head of policy at StepChange Debt Charity, said: "These agreements can be a very expensive way to buy goods, even compared to other types of high cost credit."
Citizens Advice claims that a cap – similar to one implemented on payday loans in 2015 – could save consumers up to £62million a year.
The FCA is also considering banning the sale of extended warranties by rent-to-own firms, such as BrightHouse and Perfect Home, which could save consumers up to £7.7million per year.
A spokesperson from BrightHouse said: “BrightHouse offers a choice to customers who can’t buy normal household goods outright and who are excluded from mainstream credit.
"Subject to detailed affordability checks, we are proud to be able to offer them access to Black Friday deals.
"We do this in a way that is affordable, flexible and responsible.”
A spokesperson from PerfectHome said: “The vast majority of our customers come to us because they choose to pay for products in regular instalments, rather than buy them outright in one go.
"We give customers a clear breakdown of the price, credit amount and interest they’ll pay for a one, two or three year payment plan.
"It can be a useful option for those who prefer to spread the cost over a longer period.”
BrightHouse's PS4 bundle also includes a stereo headset, while the offer from Curry's does not.
Where possible The Sun compared items to the same or next comparable product currently on the high street.
We's previously revealed how firms charge up to five times more for insurance compared to specialist providers.
MPs from all parties welcomed the success of The Sun’s "excellent campaign", and credited this website for encouraging the FCA to finally take action.
As part of these new rules, banks could be banned from charging extra for unarranged overdrafts, saving customers up to £140million a year.
BrightHouse was ordered to pay £14.8million in compensation in October last year, after the FCA ruled that it had treated customers unfairly.
While PerfectHome was ordered to pay back £2.1million to thousands of customers in March this year.
In November last year, The Sun revealed how BrightHouse staff claimed they had twisted affordability checks and been set bonus-related targets.
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