Retailer PerfectHome fined for taking customers' keys

A sign advertising a weekly rental service
Image caption Trading Standards found more than 50 keys belonging to customers at PerfectHome's store in Hull

High Street retailer PerfectHome has been fined for making some customers hand over their house keys before it delivered their purchases.

PerfectHome is a rent-to-own business and has 67 stores across the UK.

Hull magistrates court convicted the company of aggressive and misleading trading practices after more than 50 sets of house keys were found at the firm's store in the city.

PerfectHome said it disagreed with the verdict and planned to appeal.

It blamed a previous store manager for a "rogue practice" that was not company policy.

Misled customers

Under the rent-to-own model, customers take out an agreement to buy a product, and then pay weekly instalments until they own it - similar to hire purchase agreements.

Hull city council's trading standards team launched an investigation into PerfectHome after a customer complained that she had been pressured into giving her house key to them before they delivered her television.

Trading standards officers visited PerfectHome's store on Prospect Street in Hull in September 2013 and found more keys belonging to other customers.

Lizzie from Hull, who was not part of the court case, told Radio 4's You & Yours that she had to give up her keys after buying a 50-inch TV and Blu-ray player.

She said: "I just didn't have the money to buy a TV straight away. I was paying £17.50 a week for about three years."

"On the third week when I went in to pay, they said they needed my keys in case I defaulted on paying."

"I went and got the keys cut and gave them to them. I just thought it was part of the agreement."

'Aggressive trading practice'

Hull magistrates court found PerfectHome had misled customers by failing to inform them of the requirement to provide a key before they signed the hire purchase agreement.

The retailer was fined £6,000 in total and ordered to pay £10,000 in costs.

John Sandford, principal officer at Hull's trading standards team told You and Yours: "It's misleading to apply a condition if you haven't told the customer about it."

"In these cases there's a threat they're going to use the key and hold it over somebody, which is an abuse of power and an aggressive trading practice."

Alaric Smith, finance director at PerfectHome, said: "We fundamentally disagree with the magistrates court's verdict, which we believe to be wrong in both law and fact and as such will be appealing.

"The issues in the case arose in 2013, are not and never have been routine practice, and were entirely inconsistent with company policy.

"Steps were taken at the time to ensure the rogue practices referenced in the case ceased immediately. The store manager concerned is no longer with the business," he added.

PerfectHome added it would make contact with its customer Lizzie, and asked other customers concerned about the case to contact the company.

Earlier this week, MPs criticised rent-to-own businesses for charging some customers from low incomes up to 94% a year in interest to buy washing machines and TVs.

The all-party parliamentary group on debt and personal finance wants the regulator, the Financial Conduct Authority, to take action.

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