Covid-19 sparks high-cost credit traps
PEOPLE locked into high-cost loans and rent-to-own schemes should be spared the extra fees charged if they fall behind with payments, says affordable provider Fair for You (FFY).
The not-for-profit lender is calling on companies and regulators to ease the strain on customers already struggling to cope during the Covid-19 crisis.
“People face losing essential items such as a washing machine and many may have experienced aggressive payment demands,” says FFY chief executiveAngela Clements.
“But if fees are heaped on top of late payments, it makes catching up almost impossible. That fear, at a time of high anxiety, needs to be addressed through government.”
Around 3.1 million people are estimated to use high-cost credit. Last month saw the collapse of rent-to-own retailer BrightHouse whose customers are expected to continue to pay its administrators.
FFY, backed by social investors such as Big Issue Invest, helps low income families with loans for household appliances, furniture and children’s items. Its typical
● https://www.change.org/p/uk-parliament-small-ltd-company-directorsto-get-government-support-like-the-employed-and-self-employed loan is £300 over six months, customers have flexible repayments and pay 3.5 per cent interest a month or 51.1 per cent APR compared to some lenders’ 535.3 per cent APR. FFY is now seeing a spike in demand for fridge-freezers and technology to help keep children entertained as well as requests for it to include a groceries shopping option.
But Clements warns: “We’re also spotting hikes elsewhere with an Xbox offered for £700 and single bed with built-inTV for £1,474.20.”
See fairforyou.co.uk
Steer clear if you get an email or a letter offering a tempting moneyoff voucher for purchases during quarantine that claims to be from a supermarket. It’s one of an “avalanche” of scams doing the rounds, Trading Standards is warning.