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Last updated January 2016

Fair for You

Fair for You CIC is a new alternative to high impact, high cost credit, aimed at ensuring that lower income families have consistent, ethical, affordable and supportive credit when they need to buy essential items in their homes. Owned by a registered charity, Fair for You exists also to report on the social impact of this lending, and to influence policy on forming a fit-for-purpose credit sector for the lower paid. As a result, we aim to loosen the grip of the entrenched Rent-to-Own sector and help bring financial security to households left behind by the economic recovery.

Who we are

Fair for You aims to change the way we lend to lower income families in the UK.

We believe that when we lend well to lower income families, we provide, the potential to enable them the means to lift themselves out of poverty and not to be trapped within it, as we so often see due to the nature of much of the high cost credit sector.

We aim to be recognised as a leading charity campaigning and developing better financial solutions by changing the way we lend to lower income families in the UK, with easier access to a range of good value and ethical financial products and services.

We are currently the first and only UK charity to have been awarded a lending licence by the FCA, who recognise the value of our offering and robust processes in what we do.

Who we work with

A 2013 DEMOS report stated that more than a third of households in the UK had to rely on credit when hit by a one-off expenditure such as a broken fridge or washing machine. 

It is estimated that a similar number of households fall into what could be termed ‘low-paid’, existing on a total household income below £20,000 pa.

Many of these are excluded from mainstream finance and instead are forced to rely on the high-cost credit sector, itself worth in the UK around £6bn. Options here for customers include payday, or doorstep, lenders, offering to lend small amounts on very high interest rates and sometimes requiring guarantors.

There is even one growing lender who takes repayment through a meter attached to the customer’s TV – no money going in, no TV!

One of the sectors having the biggest impact is the rapidly growing Rent to Own (RTO) sector. These often operate through weekly payment stores, found on the high street in poorer parts of town. There are considered many issues with this sector, such as lack of transparency of pricing, compulsory insurances, repossession of the goods, incentivised sales staff. With an inability to get the credit that many of us take for granted, there are few alternatives for these households.

Because they offer credit the customer could not access elsewhere, initial purchase prices are top-loaded. A basic Hotpoint fridge is currently on offer* through one RTO provider with a list price of £457, totalling £786 after three years’ repayment; the same model is available via John Lewis for £168, including a two year guarantee.

Fair for You Enterprise CIC offers a new ethical and affordable alternative for those essential household goods. Quality items are bought direct from the high street retailer (currently Hotpoint/Indesit) via its own live website at regular prices, with a loan provided by, and repayable to, FFY.

In contrast with RTO lenders, the customer chooses from terms that are flexible and affordable, and decisions on applications are made immediately - based not simply on credit scores but on financial behaviour and propensity to repay. 

Many of these customers could be called ‘managing mothers’. Common characteristics include bringing up young children often alone, irregular work patters, zero-hours contracts and lack of savings; yet preferring to live on toast than miss a loan payment, while keeping their families healthy and happy. 

Debt is not for everyone, and not everyone is accepted; but if applicants are declined, they are pointed to debt advice charities such as Turn2Us.

The team behind FFY has vast experience in delivering affordable credit at community level, and the launch of the charity and the CIC follows a year’s consumer research through a series of focus groups – the customer really is at the centre of everything at FFY, and the lending model and range of products have been developed to meet genuine needs identified.

Fair for You aims to change the way we lend to lower income families in the UK.

Essentially, while not offering the answer to all debt in the UK, FFY believes that within five years it can see each customer saving up to £1,000 per item they buy compared with high cost credit; if it manages to work with just 5% of the market identified by the leading RTO company, this will see 260,000 families on the path towards better financial stability.

*Details checked 17 October 2015  


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