537854337The Centre for Responsible Credit (‘CfRC’) has today (Monday, 12th September) published new research into the social impacts of not for profit lender Fair for You, which is providing low income households with an affordable and flexible alternative to the high cost rent to own lenders, including BrightHouse.

Key findings

  • Fair for You is much cheaper than rent-to-own but that’s not all…Customers using Fair for You will typically save over £500 per item, but Fair for You also provides an excellent service.  95% of customers rate it either excellent or very good.  Customers particularly like the flexibility of the loan product, including the fact that they can set their own loan duration, can choose how often they pay (weekly, fortnightly, 4 weekly or monthly) and can over-pay or take payment holidays when needed;
  • The savings that Fair for You customers are making are vital to their financial well-being.  Half of all customers say that borrowing from Fair for You has made it much easier to cope with the day to day costs of running the household.  Over one third (38%) report that it has significantly helped them to manage their money and build up regular savings, and over a quarter (28%) of customers are now a lot better able to pay their rent, mortgage, or other household bills as a result of their Fair for You loan.

In addition to these direct financial benefits, a third of customers reported that levels of stress, anxiety and depression had reduced a lot, and over a quarter were much better able to eat healthily, cope with their physical health conditions or disabilities, or reported improvements in their child’s well-being. Around one fifth of customers reported that using Fair for You had also helped to improve relationships within their family.

Commenting on the findings, CfRC Director, Damon Gibbons, said:

Fair for You is making a real difference to its customer’s lives. Today, we are calling on local authorities, social housing landlords, utility companies and the voluntary sector to support Fair for You’s challenge to the high cost lenders and to actively promote it to their service users. Together, we can, at last, offer a positive, national, alternative to the high cost credit rip off that has existed in this country for far too long.”

Need for the FCA to act against high cost lenders

Whilst extremely positive about Fair for You’s service, our research also found that high cost lenders are systematically mis-reporting the credit payment histories of many low income borrowers. This is preventing Fair for You from providing these applicants with a chance to escape from the high cost lending market.

The CfRC is writing to Andrew Bailey, Chief Executive at the Financial Conduct Authority, to urge him to initiate an urgent review of credit reporting practices in the sector, and we will be talking to MPs to raise this issue in Parliament.

Chief Executive of Fair for You, Angela Clements, said

“Too many lenders in this market are overly expensive, inflexible, and penalise low income borrowers.   We are different.  We are not just cheaper, we treat our customers with respect and deliver a top quality service.  But we are being hampered in our ambition to deliver an alternative by widespread credit misreporting by high cost lenders.  If it really wants to see people on lower incomes provided with decent credit options then the Financial Conduct Authority has to get involved, and quickly.”