Sleepless nights and ‘rip-off’ rates: what it’s like being in debt and paying more than DOUBLE back
Alisha March, 32, took out a doorstep loan to pay for a gravestone after the loss of her parents - she's just one of MILLIONS who take out a high-cost credit loan or rent-to-own agreement every year
ALISHA March still has sleepless nights about the £450 loan she took out five years ago to pay for a headstone for her parents who'd passed away within months of each other.
The 32-year-old stay-at-home mum from Chesterfield borrowed the money from a doorstep lender and is still paying it back, the added interest taking the total cost of the loan to more than £900 - double the original amount.
"It was shortly after my father Roderick died suddenly at the age of 73 from an aortic aneurysm that I took out the loan," Alisha said.
"My mother Cynthia had died of lung cancer four months earlier at the age of 71, so they shared a headstone and it was going to cost £450.
"At the time, my husband and I were going through a bit of a rocky patch and although we share the bills and have a joint account, I didn’t feel it was the right time to be asking him for money.
"I was grieving and my head wasn’t in the right place to think clearly either."
Why we want to Stop The Credit Rip-Off
WE never want you to pay more than double the amount you've borrowed - whether it's for a new sofa or a loan to help pay your bills.
That's why The Sun has launched a campaign calling for a cap on the total cost of rent-to-own loans and doorstep lending at double the original price or loan amount.
A similar cap was introduced for payday loans in 2015 and since then the number of people struggling with unmanageable debts to those lenders has more than halved, according to Citizens Advice.
People on the lowest incomes, living in the poorest places, are paying a poverty premium - up to 7 million people have resorted to high-cost credit, according to the Department for Work and Pensions.
People whose wages or benefits don't stretch far enough need to borrow from rent-to-own or doorstep lenders to help pay for things such as an unexpected bill or to furnish their homes.
These come with exorbitant rates of interest - more than 1,500 per cent in some cases of doorstep lending.
It is scandalous that one mum who borrowed cash to help keep a roof over her family's head and ended up paying back over THREE times the original amount.
It's time to stop the credit rip-off.
Here's what we demand:
Rent-to-own
- Cap on all repayable costs at double the item list prices (including fees, add-ons and interest)
- Ban on incentives for all sales staff
- Ban on discounts for existing customers to tempt them into more credit
- Companies to publish example interest rates and costs on all payment options
Doorstep lending
- Cap at double the original amount borrowed
- Stricter affordability checks
- Ban on discounts for existing customers to tempt them into more credit
It's time to Stop the Credit Rip-off.
Alisha, lives with her husband Julius, 47, a self-employed joiner and has four children - Addison, nine, Harley, seven, Kennedy, two and Elijah, one.
She had heard of doorstep lenders when she was a child.
"I told the man I needed £450 for the headstone. He was really charming and friendly and said that wouldn’t be a problem.
"All he needed to do was look at my documents showing my tax credits – which were about £80 at the time. Then he got me to sign some paperwork. It was so simple."
The £450 was handed over to Alisha in cash, without any further explanation of the eye-wateringly high interest rate.
"I know I should have asked but I was grieving and wasn’t thinking straight," says Alisha. "He told me I’d be paying a ‘little bit more’ than I’d borrowed but that with my tax credits I could easily afford it. I was in a vulnerable position."
It's time to Stop the Credit Rip-off.
"As soon as I’d signed the paperwork I noticed his manner changed. The friendliness and charm disappeared and he was very business-like, telling me I needed to pay back £35 a week over a period of about 18 months.
"I didn’t even work out the sums at the time but it would mean that I’d be paying back £900 – double the amount I’d borrowed."
Alisha started paying back the £35 a week online and didn’t think much of it until Julius’s salary went up a few weeks later and their tax credits stopped.
"Suddenly I worried where I was going to get the money from and I stopped paying," she says.
Have you ever had a problem with a rent-to-own firm or doorstep lender? Tell us your story! Email: [email protected]
"We moved house so it took a while for it to catch up with me but then the door knocked a couple of times and it was one of their salesmen coming to collect.
"It sounds silly but I hadn’t breathed a word about the loan to Julius so if he was in the house with me, I had to pretend the lenders were charity doorknockers and tell them to go away.
"I started suffering from sleepless nights. I kept wondering if they’d send a bailiff or take me to court.
"One day a different man came to the door when Julius was out and said I needed to keep paying my £35 a week and I said I could only afford £5 and that’s all I’d be paying.
"He wasn’t happy but that’s the arrangement we made and I’m still paying that off now.
Alternatives to high-cost credit
IF you're in serious money trouble then here are some alternative places where you can go to for help:
Credit Unions - These are small not-for-profit groups that help people save and borrow money, and you may be able to get a loan. You can find out which credit union you are eligible to join by searching
Ask for an advance - You can ask your employer to give you an advance on your wages, or the JobCentre Plus may be able to arrange a short-term advance on your first benefit payment.
Foodbanks - These organisations help provide emergency food and toiletries to see you through to payday. You can see if you qualify for your nearest branch .
Check your benefits - Make sure that you are getting all the benefits that you are entitled to using this calculator from the charity .
Freecyle/Facebook groups/Gumtree and eBay - You maybe able to find free or cheap second-hand furniture.
Boost your credit score - If you're never rejected for credit then there are ways to show lenders that you can be responsible with your cash.
"They’ve added some more charges to it – I’m not sure how much – for late payment and I will be paying it off for years."
Alisha is just one of the million households who turned to high-cost credit from doorstep lenders or rent-to-own firms last year.
They've made around £1billion in revenue in 2017, preying on those with the lowest incomes and living in the poorest places in Britain, charging them excessively high interest rates – more than 1,500 per cent in some cases of doorstep lending.
These companies rely on the desperation of their customers and this concerns Katie Evans, Head of Research and Policy at the Money and Mental Health Policy Institute.
"Doorstep lenders target those who are high-risk credit wise, and these people tend to be more vulnerable, so they might be new arrivals in the UK, or a young person without a credit rating or someone who has had something go wrong money-wise in the past,’ says Katie.
"Half the people in problem debt will also have mental health problems.
"They might have short-term memory issues, increased impulsivity, difficulties planning ahead or understanding the long-term consequences of their acts.
"If you’re feeling low, then something new is going to make you feel better and doorstep lenders will play on this impulsivity and people get trapped."
Stewart Forbes, a 48 year-old taxi driver from Shrewsbury, felt trapped when the engine in his car – his only way to earn income – blew up in August 2016.
"I needed £1,800 quick to get it fixed," says Stewart.
"Without my car I couldn’t work and I had to earn money. I couldn’t afford a new car or find a cheaper price to fix it so I ended up taking a doorstep for the full amount.
"I’d taken out three small loans with them before so when the agent came round the next time to collect my payment I asked for another loan.
"I still had £400 to pay off so they just added it on so the new amount was £2,200."
As they already knew Stewart’s credit history, the next day the agent was over with a plastic wallet full of cash in £50 notes.
"I signed another agreement, too desperate to pay too much attention to the detail, which was a mistake," admits Stewart.
"It wasn’t until I was back on the road again when the car was fixed that I took a proper look at the interest rate and got a big shock."
The interest rate was 167.5 percent APR. The weekly repayments were £52.80 a week for 84 weeks so in total Stewart was paying £4,435.20, more than twice what he borrowed.
"I’ve been paying £55 cash a week because I just want it paid off,’ says Stewart, who is married to Karen, 49 and has four children Jessie 28, Becky 21, Blake 18, Denny, 12.
"I’ve only got £315 left to pay and I can’t wait to get rid of it finally.
"The guy even turned up last Boxing Day to collect his weekly amount. I didn’t have the cash on me because I wasn’t expecting him and I felt so ashamed and disgusted.
"We had friends and family and guests over and I had debt collectors at my door.
"He told me it was better to pay something than not at all so I gave him a pound, which he logged.
"These lenders shouldn’t be able to charge such high rates. Luckily I’ve been able to pay them every week but some people aren’t so lucky.
"I had to take a loan out to pay off a loan. It’s a dangerous and vicious cycle."
Hounding people at the most inopportune times is something Rachael Penn understands well.
Just hours after giving birth to her daughter Cassidy by caesarean, an agent from a rent-to-own firm was on the phone enquiring about their payment.
"I usually make the payment at the same time in the morning every two weeks, so it was just a few hours late but I couldn’t believe it,’ says Rachael, 38, from Warrington in Cheshire, who had bought items from the rent-to-own store in 2012 when she found herself single, jobless and living in a rented flat without a stick of furniture or even a fridge.
"My family lived in Spain and I’d moved to Coventry to be with my boyfriend but then we broke up and I lost my job as a customer service adviser at the same time,’ says Rachael, whose daughter Cassidy is now two.
How to get help for free
THERE are lots of groups who can help you with your problem debts.
- Citizens Advice - 0808 800 9060
- StepChange - 0800 138 1111
- National Debtline - 0808 808 4000
You can also find information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) on the and on the Government's
Speak to one of these organisations - don't be tempted to use a claims managment firm that will claim it can write-off lots of your debts in return for a large up-front fee.
"I suffer with hypermobility – a painful condition when your bones slip out of your joints easily - and I had taken too much time off because of illness."
Rachael hadn’t lived in the UK for 10 years so her credit rating was low.
"At first I was looking at getting some secondhand furniture but I saw the store on the high street and thought I could get something brand new and it would last longer," she says.
"It was very easy to get an agreement. I just walked in, filled out a form. They needed two references and they could be your friends.
"In fact, one of mine was an ex-work colleague who didn’t really know me that well.
MORE ON STOP THE CREDIT RIP-OFF
Rachael took out an agreement for a washing machine and fridge-freezer first and paid around £24 by debit card over the phone every fortnight and then bought a three-piece sofa and TV, so the weekly payment increased to about £40 and extended over three years.
"I knew I was paying over the odds," says Rachael. "I found the exact same washing machine on Argos for £330 but I ended up paying £980 for it over three years.
"At the time, my rent was covered by housing benefit and I had Job Seeker's Allowance, which was £75 a week.
"I never missed a payment but they called me every week to check, making me feel like paying them back was an absolute priority. Like I had to choose between paying them or buying food."
The humiliation didn’t stop there. As well as hounding her within hours of her c-section, the store required her to go into the store every year to show them her home insurance policy to double check it covered rent-to-own products.
"They’d call the insurer and pass the phone to me so I’d have to do all of my security questions, on the shop floor in front of everyone and it was so embarrassing," recalls Rachael.
"I’ve paid everything off now but I must have paid more than £3,000 altogether when I borrowed less than £1,500 worth of items. It really is a rip off."
Alisha agrees: "I think these firms target the vulnerable – people on benefits, people who won’t have the income to get help from a bank. I’d certainly never do it again."
How to cut the cost of your debt
HAVING large amounts of debt can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis - knowing your spending patterns is the first step to managing your money.
Work out your budget - by writing down your income and taking away your essential bills such as food and transport.
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs.
Pay off more than the minimum - If you’ve got credit card debts, aim to pay off more than the minimum amount each month to bring down your bill quicker.
Pay your most expensive credit card sooner - If you have more than one credit card and can’t pay the balance off in full each month, prioritise the most expensive card (the one with the highest interest rate).
Prioritise your debts - If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them.
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don't pay.
Get free advice - If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further.
Groups such as Citizens Advice and National Debtline offer free advice and can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.
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