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New pay-as-you-view loans could cause more debt misery

Pay-as-you-view borrowing is a relatively new concept where customers purchasing household products like TV’s, washing machines and fridge freezers do so via a coin meter attached to each appliance.

Families who cannot get credit because of low incomes are using this coin meter method to purchase new household appliances but could end up being saddled with debts because of the high APRs being charged. Anti poverty campaigners have already demanded that action is taken to help protect the poor and vulnerable from this new form of lending.

The company would install the meter to a customer’s TV; the meter determines how long the TV stays on and only regular coin payments stops the TV from being switched off. Each meter essentially acts as a way of enforcing that the customer keeps up with repayments.

Average APR’s are around 40 per cent and these pay-as-you-view loan companies target low income families and people with poor credit ratings; anyone who cannot access cheaper credit. The interest rate obviously makes buying each appliance far more expensive; it’s estimated that a £200 appliance could end up costing as much as £500.

Unlike the payday loans market which has over the last 12 months seen a raft of high profile daytime TV advertising, the pay-as-you-view market is ‘unseen on TV’. One company based in South Wales: Buy as You View Limited claims to have over 100,000 customers’ across the UK, mainly generated by word of mouth.

The charity Bernado’s is asking that the Government look at reforming the banking system to help low income families and individuals get better access to more affordable forms of credit. Bernado’s concern is that many people cannot access mainstream credit and are left depending on high interest lenders which can cause debt problems that last for years.

Neera Sharma, Bernado’s assistant director of policy and research said: “Exclusion from mainstream financial services means low-income families tend to use high-interest forms of home credit and accumulate a vast amount of debt.”


“The products offered play on the vulnerability of people on a low income, whose main source of entertainment is the TV and who will therefore prioritise the Buy-as-you-view loan because doing so ensures they can continue to watch.”

“In the case of some of the mums we spoke to, they reported that they cannot afford not to put the £1 in the meter because the children would have no entertainment without the TV.”

The Buy-as-you-view commercial model is regulated and 100 per cent legal. It is seen by many as a better alternative to the unregulated option many people turn to: loan sharks.

There has been some concern from unhappy customers: Consumer Action Group forums have seen worried customers asking about the amount of interest charged and ‘service’ packages which mean additional payments to insure appliances. Some other customers are expressing concern about the high prices they pay when compared to average high street prices.

Buy-as-you-view say: “Some have argued that those who cannot access mainstream credit or who are considered as hard pressed should not borrow money.”

“Here at BAYV we believe that our customers are those who often have more need to spread the cost of paying for their purchases than wealthier people.”

“For us, the aim is to offer suitable products that meet our customer’s needs and requirements, on affordable payment terms and that allow for flexibility if the customer encounters any difficulties over the period of the loan or if their circumstances change.”

Craig Gedey, Marketing Manager at Debt Advisory Line said: “There is quite obviously a healthy demand for the Buy-as-you-view products; however people should honestly think about how much they really need a new TV, a new mobile phone or other non-essential items especially if they think the repayments or APR’s are too high.”

“Ironically it seems that it is always the poorest in society who are forced into taking expensive forms of credit that usually incur high rates interest.”

“Anyone who finds themselves struggling to repay any form of credit can visit or call us on 08700 157 7254 to find out how we can help repay these debts.”

“On average our customers reduce debt repayments by 49 per cent.”