Bright House misleading consumers with their interest rate?

smjxm09

Bright House seem to be popping up all over the High Street these days and specialize in selling goods via weekly payment plans with a claimed APR of 64.7%APR.

The following is just one example of how Bright House gives the impression that they offer goods at 64.7%APR but actually sells them at four times the typical retail price over 3 years.

Samsung UE46F700 television. High Street price between £999- £1099.

Bright House cash price £2113.26 or 156 weekly payments of £26. Total price paid £4,056.00. So Mr and Mrs Joe Public are paying almost four times the cash price of buying the same TV from somewhere like Currys.

OK I know that many of Bright House customers might well not get a loan if bought from elsewhere but Bright House should be up front with the true APR figure and not the tosh they give out.

CKhalvashi

A shop can charge what they want; the fact it's double what you can pay anywhere else is neither here nor there.

It's a case of shopping around for the best deal on a product at cash price, as well as total financed price.

CK

Wyndham

But APR is ANNUAL percentage rate, and I think (doing rough maths) that is around 65% on the figures you have given. Overall the price paid is 4 times as much, but that's over 3 years worth of payments, making the interest rate around 3x65 = 195% over the three years.

The main problem seems to be that you start off paying almost twice as much for the TV as you would from another store.

CKhalvashi

Wyndham wrote: »

But APR is ANNUAL percentage rate, and I think (doing rough maths) that is around 65% on the figures you have given. Overall the price paid is 4 times as much, but that's over 3 years worth of payments, making the interest rate around 3x65 = 195% over the three years.

The main problem seems to be that you start off paying almost twice as much for the TV as you would from another store.

That's only if the balance is not decreasing each month.

The balance will be decreasing, so you're looking at an average of around 32.5%, rather than an average of 65% interest, to get a 65% APR.

If it's 65% fixed, then that's around 130% APR.

CK

bigadaj

Wyndham wrote: »

But APR is ANNUAL percentage rate, and I think (doing rough maths) that is around 65% on the figures you have given. Overall the price paid is 4 times as much, but that's over 3 years worth of payments, making the interest rate around 3x65 = 195% over the three years.

The main problem seems to be that you start off paying almost twice as much for the TV as you would from another store.

So whats your proposed solution for protecting people from their own stupidity?

bsms1147

It is 64.7% APR (based on Brighthouse's orginal price)

http://brian-stewart.orpheusweb.co.uk/credit/javascript/equalapr.htm

(284.5% based on actual highstreet price)

janiebquick

There is a branch of Bright House in the town centre where I live. I never see anyone in there (hooray!), probably because there is a thriving Freecycle/Freegle/Cheapcycle network AND a community furniture project.

InsideInsurance

bsms1147 wrote: »

It is 64.7% APR (based on Brighthouse's orginal price)

http://brian-stewart.orpheusweb.co.uk/credit/javascript/equalapr.htm

(284.5% based on actual highstreet price)

So what APR does Currys charge on the TV given you can get the same TV online for about 15% less than Currys?

How about high street jewellers that do branded watches at the RRP with 0% APR credit -v- Iconic Watches that sell the same watch for 20% discount but no credit

The official APR calculation would only compare the cash -v- credit price. It will not consider if the cash price is reasonable in the first place.

Arguably there is something a little disingenuous about it given they probably never intend to sell anything for cash but then people are free to do their research about how much goods cost elsewhere.

That said, its been done for decades. You are on a damned safe bet that if you find anywhere offering 0% credit that you can find the same item elsewhere for cheaper

dealer_wins

Bright House, ripping off people who would only be ripped off elsewhere anyway LOL

pelirocco

smjxm09 wrote: »

Bright House seem to be popping up all over the High Street these days and specialize in selling goods via weekly payment plans with a claimed APR of 64.7%APR.

The following is just one example of how Bright House gives the impression that they offer goods at 64.7%APR but actually sells them at four times the typical retail price over 3 years.

Samsung UE46F700 television. High Street price between £999- £1099.

Bright House cash price £2113.26 or 156 weekly payments of £26. Total price paid £4,056.00. So Mr and Mrs Joe Public are paying almost four times the cash price of buying the same TV from somewhere like Currys.

OK I know that many of Bright House customers might well not get a loan if bought from elsewhere but Bright House should be up front with the true APR figure and not the tosh they give out.

You obviously dont understand what APR is !

Im not defending Brighthouse , but look at buying a house with at the moment very low interest , but the amount of interest paid over the whole term is staggering

poppasmurf_bewdley

Bright House is only doing what Yes Car Credit did before them. They sell overpriced goods on high rate credit to people who can't get anything else. And the only reason YCC isn't in business now is because they were stopped from selling their overpriced additonal insurances in their deals.

And Bright House are doing nothing differently to the myriad sofa dealers advertising on TV reduced from £1000 to £700 with four years interest free credit on sofas which are only worth about £150 to start off with.