Developing a code of practice for Rent to Own lenders
The Centre for Responsible Credit has worked with Church Action on Poverty and Thrive to secure a set of key customer commitments from the main Rent to Own lenders.
‘Improving Practice in the Rent to Own Industry’ sets out the progress made by the Thrive project in Stockton on Tees. Set up by Church Action on Poverty, and working in partnership with Durham University's Centre for Social Justice and Community Action, the project has successfully engaged local residents around issues of concern and quickly identified a high level of use of rent to own companies in the area. With assistance from the Centre for Responsible Credit, and funding from Friends Provident Foundation, the group was then helped to formulate a set of ‘asks’ to which the main three rent to own firms have now responded with seven key commitments.
The seven key commitments have been given by Brighthouse, PerfectHome and Buy As You View, and incorporated within their customer charters. They will benefit up to an estimated 325,000 customers. The commitments are:
- To ensure that goods are competitively priced;
- To use mystery shopping exercises to evaluate how prices are explained to their customers;
- To provide customers with a range of payment options;
- To limit default charges to no more than the actual cost incurred to the company;
- To put in place policies and procedures to help people in financial difficulty and to refer customers in arrears to free, independent, debt advice agencies;
- To develop clear policies for future complaints handling, and
- To provide clear annual statements of account.
In addition to these commitments, the three firms are now also working with us to see how customer data sharing through credit reference agencies could potentially benefit consumers by allowing them to improve their credit scores and benefit from lower risk based pricing.
The full report is available here.