BrightHouse’s new TV ad inadvertently exposes true extent of sky-high fees
The rent-to-own firm's new TV advert looks like it's showing off a good deal at first glance - but it actually reveals the true scale of all the extra fees it levies on customers
RENT-TO-OWN firm BrightHouse has unveiled a new TV advert that actually seems to include a good deal. But there's a catch.
Upon closer inspection, the company's latest deal reveals the true scale of the extra fees it charges customers.
The ad, which can be viewed on the page, features a Beko 6KG load washing machine that has a product price - or "upfront" price - of £180.50.
That's actually the cheapest price than we've found anywhere else on the high street.
Not bad, you may think.
But, of course, not everyone's got £200 to drop on a new machine.
The company did take the trouble to include this "total cost" in the advert.
But what it failed to mention, is that if the customer also takes out the company's optional aftercare service "BrightCare" or its expensive insurance, the weekly costs go up by £1.15 a week.
Sure, BrightHouse customers don't have to choose to have the add-ons.
But many rent-to-own customers do because they're worried about paying for potentially costly repairs or they don't have another form of insurance that is required when taking out any form of "hire-purchase" agreement, which a BrightHouse purchase is.
Over the course of 156 weeks, the add-ons put an extra £179.40 on to the "total cost" of the machine spelled out in the advert, taking the actual cost to the customer to £647.40.
And £647.40 is a percentage increase of just under 260 percent of the original product price listed by BrightHouse.
Such high costs are exactly why The Sun launched our Stop the Credit Rip-Off campaign last month - calling for a cap on the total costs rent-to-own firms can charge at double the original item selling price.
A similar cap was introduced on payday lending in 2015.
As a result, Citizens Advice has reported that calls it receives about problem payday loan debt have halved.
Why we want to Stop The Credit Rip-Off
WE never want you to pay more than double the amount you've borrowed - whether it's for a new sofa or a loan to help pay your bills.
That's why The Sun has launched a campaign calling for a cap on the total cost of rent-to-own loans and doorstep lending at double the original price or loan amount.
A similar cap was introduced for payday loans in 2015 and since then the number of people struggling with unmanageable debts to those lenders has more than halved, according to Citizens Advice.
People on the lowest incomes, living in the poorest places, are paying a poverty premium - up to 7 million people have resorted to high-cost credit, according to the Department for Work and Pensions.
People whose wages or benefits don't stretch far enough need to borrow from rent-to-own or doorstep lenders to help pay for things such as an unexpected bill or to furnish their homes.
These come with exorbitant rates of interest - more than 1,500 per cent in some cases of doorstep lending.
It is scandalous that one mum who borrowed cash to help keep a roof over her family's head and ended up paying back over THREE times the original amount.
It's time to stop the credit rip-off.
Here's what we demand:
Rent-to-own
- Cap on all repayable costs at double the item list prices (including fees, add-ons and interest)
- Ban on incentives for all sales staff
- Ban on discounts for existing customers to tempt them into more credit
- Companies to publish example interest rates and costs on all payment options
Doorstep lending
- Cap at double the original amount borrowed
- Stricter affordability checks
- Ban on discounts for existing customers to tempt them into more credit
It's time to Stop the Credit Rip-off.
In launching its new TV ad on its Facebook page, BrightHouse gives customers a to more of its latest deals. These include three games console bundle deals for the Nintendo Switch, Sony PS4 Slim and Xbox One.
They too look like decent value for money when compared to the upfront costs for the same goods from retailers.
But again, once you add on BrightHouse's BrightCare and insurance, the prices further sky rocket.
For example, BrightHouse lists the Nintendo Switch Mario Odyssey - Neon bundle at a product price of £357.64, while it's available from Tesco at not much less at £321.
If a BrightHouse customer pays for it over the maximum repayment period of 130 weeks, they repay £993.20 in total (including BrightCare and insurance).
That's a percentage increase of 178 percent of the initial product price.
Similarly, the Sony PS4 Slim 1TB Fifa 18 & GT Sport Bundle is listed at a product price of £404.29, which is cheaper than the £427 Argos price.
Over 130 weeks it costs £1,123.20, including the same add-ons as above. That's also a percentage increase of 178 percent of the initial product price.
And for the Xbox One X Player Unknown: Battlegrounds Bundle, BrightHouse charges a product price of £590.89, while Tesco only charges £523.
Over 130 weeks, BrightHouse customers pay a total of £997.79 once aftercare and insurance are included - that's a percentage increase of 69 percent of the original product price.
So before you're tempted to sign up to any of the deals on the new advert, remember that BrightHouse can charge higher initial prices than retailers as well as high levels of interest for giving their customers the ability to spread their repayments.
Gillian Guy, chief executive of Citizens Advice, told Sun Online: "High interest rates, late payment fees and expensive extras like insurance and delivery make the costs quickly add up.
"Our evidence shows that rent-to-own customers often struggle to pay for goods that they can end up having to return.
"As part of their high-cost credit review, the FCA should put in place measures to protect people from expensive borrowing and spiralling debts.
"The payday lending cap has been a success. The FCA should build on this to make sure rent-to-own consumers never pay back more than double the list price of a product."
A BrightHouse spokesman said: "We seek to be competitive on product price, but we never claim to be the cheapest.
"The flexibility and returnability of our offer means we have higher costs.
"We also have lower sales volumes than mainstream retailers.
"Our customers can’t buy the essential products they need outright, either from stores or online.
"BrightHouse provides a unique way for those on low incomes, who are excluded from mainstream credit, to get the everyday things many take for granted."
Remember, if you don't have the cash to pay for goods upfront and have a poor credit score, there are much more affordable ways of getting hold of the items you need without relying on your nearest rent-to-own firm.
You can learn about the alternatives available here to save yourself a packet.
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