“Rent-to-own” retailers such as BrightHouse will be banned from charging vulnerable customers over the odds for household goods under new rules proposed by financial regulators on Thursday.
Rent to own involves customers obtaining products such as washing machines or electronics under hire-purchase agreements before taking ownership when they have completed all the payments.
Under the proposed rules, which will come into force in April, firms will be banned from charging more than 100 per cent interest on items.
The implication is obvious: would appear that 100% interest rates are considered fair. This is what it is like to live in the UK in 2018.
No, the ruling is that total charges over the lifetime of the agreement not exceed 100% of the cost of the item.
20% interest rates per year over 5 years would meet this. 10% over 10 years. 3% over 30 years.
Wonder what the interest rate was when Spudda bought his first flat back in the 80s? Did he, over the years, pay more interest than principal? And would he describe that as a 100% interest rate?
Now, change the subject of the question. Would an accountant so describe?