Lending money to the poor is a rich man's business. But the poor are paying dearly

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The Independent Online

Lending money to the poorest people in society is profitable enough to attract some of the most prosperous businessmen.

BrightHouse - headed by Guy Hands, the multimillionaire financier who lives in a £10m house in Kent - is among the shops that will sell goods on credit to people on low incomes.

BrightHouse's chain of 100 high street shops are in some of the most deprived areas of Britain and boast 100,000 customers, many who cannot get credit elsewhere.

It sells furniture, white goods, stereos and games.

Customers need only supply details of their income, address and five signatures of people confirming the information, before gaining credit.

Goods are offered at an APR of 29.9 per cent, similar to many high street stores. Customers make weekly payments by direct debit or pay cash at the stores.

But the APR can go up to 80 per cent if people sign up for the optional service cover, which allows them to return goods and cease payments, or swap goods.

A New Economics Foundation report,Profiting from Poverty, last year criticised the store's credit techniques. The report said pricesat BrightHouse were much higher than other high street shops.

For instance, a PlayStation games console and games cost £274.32 from BrightHouse, but £199 in Dixons.

Catherine Haines, a volunteer at the Bulwell Credit Union said: "They are just rip-off merchants who target people who want nice stuff in their home."

Mike Cooper, the marketing director at BrightHouse, said the charges against the firm were unfounded. "Our prices are higher because our structure is different," he said. "We are giving credit to people who would not be able to get these goods elsewhere.

"Why shouldn't people on low incomes be able to buy things for their home?"

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