As last year drew to a close, a scandal surrounding rent-to-own firm BrightHouse and its failure to properly refund its customers was emblazoned across the nation’s newspapers. Whilst the Financial Conduct Authority took action and ordered the business to repay its clients, a report by Citizens Advice unveiled a huge number of issues within the rent-to-buy industry as a whole.

The rent-to-own market is fairly small; in 2016 roughly 200,000 people purchased a product through rent-to-own businesses and an estimated 400,000 consumers owed debt on such products. Last year, Citizens Advice aided over 5,000 people with debts stemming from this industry, many of which were under-35s.

The industry has a history of pushing vulnerable people, such as those with learning difficulties, into signing contracts. The research confirms that vulnerable people make up a massive share of the rent-to-own market’s clients, with the average customer having high levels of debt and a low income.

Combining the high cost of rent-to-own products and the financial hardships faced by many of the market’s clients makes for a tragic picture; many rent-to-own customers spiral further into debt and have falling credit ratings as a consequence of their purchase.

With young people in the North East having some of the highest levels of debt in the nation, this report greatly concerns those of us at Citizens Advice Gateshead.

As appealing as rent-to-own can seem, we strongly advise anyone who plans on buying a product through such schemes to review their finances before committing to a purchase. Additionally, Citizens Advice is now campaigning for the Financial Conduct Authority to place stronger protections on the market.

If you’re having problems regarding a rent-to-own transaction, please contact us for free and confidential advice.