Barnado's and credit firms

Families on low incomes are being exploited by so-called rent-to-own suppliers of household appliances, a children's charity has warned.

Barnardo's said rent-to-own lenders should be forced to display the equivalent High Street price of the product and make interest rates clear.


Barnardo's said consumers were paying up to 150% more for some standard household appliances.
It cited a three-year rental arrangement with a well-known weekly payment store that cost £1,074 for a fridge freezer, compared with a High Street price for the same product of £430.

The above quotes come from the (still biased) BBC.

Barnado's is a charity focused on children.  What business is it of theirs to be interfering in what happens in the high street?  Would they sooner that these stores didn't extend credit to low paid families and that these families then went without these appliances?

Or is the sub-text that such appliances should be provided by the 'State'?

I suspect that a big part of the reason for the high costs reflects the risk attached to advancing this credit.  A major reason for the sub-prime mortgage crisis was that lenders forgot one of the basic rules of lending which is to match reward and risk.  They lent to everyone with a heartbeat (and probably some without) and then, surprise, surprise, found that many simply couldn't afford to pay back!  Cue economic doom and gloom, all around.

Rather that people know upfront, the cost of this appliance is so much per week for the next three years than the lender making the sale and then having to come 'cap in hand' to the taxpayer to be bailed out.

Not forgetting of course, that people still have free will!  They can make a choice.  It goes something like this:

Mum:  We need a new freezer.  The old one is unrepairable.  I could buy one new, for £430 or pay £6.88 a week for three years.

Dad or baby-father or partner:  Well we haven't got £430, so we either buy on tick or we do without.

Mum:  I need a freezer.  Then I can stock up on food when it is cheap and save money, so it will have to be on tick.

or

Mum: I need a freezer.  Then I can stock up on food when it is cheap and save money.  I wonder if Barnado's will ignore the Charity Commissioner and give me the cost of one?