Can short-term lenders ever be ethical? New launch Fair For You thinks so

Written by Lisa Stanley Mann on 18th January 2016

Fair For You is a new, different entrant in the otherwise shrinking, rather murky world of short-term lending.

Similar to pay day lenders, short term lenders such as BrightHouse and Buy as You View traditionally charge APRs upwards of around 68% when providing people with weekly-repayable loans to buy household goods such as TVs, white goods, furniture, etc.

Fairforyou.co.uk, set up as a CIC owned by a charity with a full FCA lending licence, says it wants to change the world of high cost credit forever and ‘take on those aggressive, high cost lenders’. It is targeting people on low incomes, often on zero hours contracts, who have little other means of buying high street goods.

The organisation is working with a range of partners, including Turn2Us and the Money Advice Trust, to bring the offering to market. It says there is a genuine, overwhelming need for “non-judgmental, affordable lending,” and is the result of “frustration with the government and the financial sector’s lack of understanding of how low-paid, struggling households cope.”

Simply, it wants to offer “ordinary working people, who might be left behind by the recovering economy, another option for buying essential goods without the rip-off they may otherwise encounter.”

Fair For You estimates families could save around £1,000 per item against the same item bought via Brighthouse.

Fair For You says it wants to “change the world of high-cost credit forever, and bring a new financial education to those who may long have felt themselves excluded.”

How does it work?

  • Fair For You is not a credit union, but has emerged from that sector and views itself as complementary.
  • It operates online only, 24/7, across the UK.
  • There are no set up fees and no early repayment charges. They won’t sell 50″ TVs or compulsory insurances. Customers are able to take occasional payment breaks.
  • There are no late payment fees although fees will apply for collecting debt upon non payment.
  • There are no delivery costs or fees to take away old items.
  • Goods are supplied at high street prices, currently by Whirlpool/Indesit.
  • It says its loans are made less on credit scores than propensity to pay. Any applicants that are turned down are signposted to debt advice and other sources.