Hello Dear Reader,
In times of hardship and at worst a financial crisis, there are always those who profit out of the misery of others. The current financial crisis has led to profiteering of the very worst kind. The three businesses which are currently flourishing, rent to own household items, pay day loans and gambling, are those which prey upon those with the least to spend and the most to lose.
Here's a quote from Retail Week, etolling the virtues of 'Bright House'.
"Rent-to-own furniture and electricals retailer BrightHouse has reported another strong year with underlying EBITDA up 10.8% to £49.4m in the year to March 31.
Like-for-likes jumped 8.3% while revenue was up 11.4% to £297m. In the first quarter of the current year like-for-likes strengthened, growing 9.1%.
The retailer opened 27 stores in the year, taking its portfolio to 280.
BrightHouse chief executive Leo McKee said the retailer, which is aimed at low-income shoppers, benefited from an investment in ecommerce, supply chain and risk management systems."
The company even made such 'brilliant' profits with rising 'bad debts'. This is what Credittoday had to say about Bright House's 'bad debts'.
"Bad debt rise at BrightHouse 22 August 2013
Bad debt charges rose for the third consecutive year at rent-to-own retailer BrightHouse, hitting £23.7m for the year ending March 2013.
This was a 10% increase on the £21.5m bad debt charge the firm incurred in 2012, according to a results statement for BrightHouse Group that said bad debt fell from 8.1% to 8% of total turnover in the 12 months to March 2013.
But a rise in turnover meant on that basis that bad debts stood at £23.7m for 2013 based on annual revenues of £296.9m, a rise on the £21.5m of bad debts incurred in 2012 from revenues of £266.4m."
The report then went on to debate the reasons for bad debts and then had the audacity to blame the cuts to benefits.
" “In addition, the government’s much heralded changes to the welfare system have increased uncertainty for a significant portion of BrightHouse customers who are completely or partially reliant upon benefits,” the firm said."
Here's an example of one of their products for sale. They have for sale a Beko electric cooker with an induction hob. They can be bought from Boots. com(a competitively priced company) for £260. However, if you are on benefits or have bad credit, then you won't be able to buy it on 'tick' and rightly so, if you can't afford to pay, they you can't have it. However, you can buy if from Brighthouse and yes, it does say £1,872 for a £260 cooker!!!!!!!!!!
|Cash price / amount of credit||£975.35|
|Number of weeks||156|
|Annual fixed interest rate* / Representative APR||64.7%|
Yes, you can buy it, if you're really poor and really desperate for seven times the price. If you have really bad credit then they will sell it to you, but at a higher amount of interest. Before Brighthouse sue me, I must add, what they do is totally legal. I don't like it and lay the blame solely at the feet of the UK government that allow such practise.
It's nothing more than the blatant and shameless exploitation of the poorest people. Lending from reputable banks has been tightened as banks legally have to ensure the affordability of the borrowers ability to pay. I was really impressed by the rigorous checks we underwent when applying for a new mortgage. Under those new Financial Services Authority guidelines, no one on benefits or minimum wage should be able to borrow money as they just don't have any spare. However, 'payday' loan companies and 'rent-to-own' retailers are just making the poor poorer and the government is totally condoning it.
The pay day loan companies even get bashed by the Daily Mail, for those of you not in the UK, it's an right wing newspaper who generally make money out of poor journalism and lambasting anything that they don't agree with. In my search for news about Wonga.com, I found the following:
Wonga profits hit £1.2million a week: Number of payday loans soars 70% in a year
- Controversial firm Wonga approves 10,400 loans a day it has emerged
- The company was criticised for profiting from the misery of the poor
Wonga approves 10,400 loans a day and makes £1.2million a week in profit, it emerged yesterday.
The number of loans handed out by the controversial payday loans company has soared by 70 per cent in a year.
Wonga, which charges stratospheric annual interest rates, was criticised yesterday for profiting from the misery of the poor and encouraging them to sink deeper into debt.
In the spirit of fairness, Brighthouse and Wonga.com are just two of many companies who legally charge extremely high interest rates to those who just couldn't and shouldn't borrow any money as they are barely existing anyway. I must reiterate, what they do is legal.
What can we do?
Recycle everything you don't need. Our local charity shops sell almost anything you could need for your home. Electricians donate their time free of charge and PAT test electrical items for sale in charity shops where people on low incomes can buy cookers, washing machines and household items. They receive items that don't make it to the shop floor that you can inquire about. They sell plates, saucepans and kitchen equipment. They sell bedding and curtains.
What you can do is to keep donating household items as well as clothing to charity shops. Some won't take anything and are fussy. If that's the case, seek out local for sale boards in shops, cafes and post offices and offer furniture or household items. A lot of people on low incomes can't afford the internet. Contact the local health visitors, the citizens advice bureau or doctor's surgery and see if you can advertise 'free' items. If you can help a family out, take it to them as it's highly unlikely that they have a car.
My best advice to anyone who is desperate for items for their homes are to put an advert on Freecycle. I've got rid of items as I'm down sizing as I've seen people are in need. If you are in need of any financial advice then your first steps should be to the Citizen's Advice who can put you in touch with either Christians Against Poverty or Step Change. If you have access to the internet ( as you may be reading this) then a good starting point is the Money Advice Service.
Here's what everyone of us can do this week to help those most in need from turning to debt.
1. Donate food to your local Foodbank - most payday loans are to feed a family.
2.Donate clothes, bedding, towels, sheets, duvets to your local charity shop - check they sell those items. I also make sure I give items to charity shops that don't over charge. I want people in need to be able to afford to buy what I've donated.
3. Use Freecycle to give away household items.
4. If you having a clear out, take your items to a car boot sale and sell them. People on low incomes can afford car boot sales and they are a vital way of clothing families. Especially baby items and children's clothing.
5. Give toys and books to charity shops. This is so vital at this time of year, families will be getting in debt to buy toys for their children. Any donations will go a small way to helping those who might otherwise turn to debt.
6. Write to your MP - make your views known about pay day loans and rent-to-buy schemes that lend to people who can not afford to take out loans of any sort!
I know some Dear Readers have turned to Step Change and Christians Against Poverty for support to get yourselves and your families out of debt and to work out a sustainable family budget. I know many Dear Readers have completely changed how you live to avoid any future debts. You are the lucky ones as you are changing your lives. We can't change everybody but we can do what we can to help others to find affordable means to furnish their homes, cook their food and clothe their families.
Over to you, please pledge what you can do this week. Let's share some hope for the families who are really suffering. Just like FrugalMummy says
"If you have a roof over your head tonight and have had a meal today, then like me you are truly blessed. Tonight I'm praying for those in our society who are not as fortunate: for whatever reason."
Let's hear you!
Love Froogs xxxxxxxxxx