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Cautious retailers reject ‘free laptop’ customers

by Stuart Wilson, Wednesday 3 December 2008

A broadband comparison website has revealed that UK mobile providers and retailers are together turning away half of all the applications they receive from customers for a mobile broadband contract, which includes a free laptop as part of the package. Despite the tough economic backdrop, the mobile providers and retailers are rejecting 50% of all applicants after running stringent credit checks.

The comparison website, Broadband Expert, has seen a huge rise in the popularity of mobile broadband and free laptop deals in the run-up to Christmas, yet one mobile provider has rejected over 75% of sales after running credit checks.

Broadband Expert commercial director Rob Webber, said: “Companies are spending huge amounts on advertising campaigns promoting these offers yet when the consumer comes to sign up, there is a strong chance they will be refused based on a credit check.”

Webber claims that there is a certain irony in the high rejection rates of these contracts since the offer of spreading the cost of a laptop over an extended period is, “particularly popular with students and those on lower incomes who can not afford the upfront costs of a new laptop, yet these are the people most likely to be excluded from these offers.”

Most mobile broadband and laptop deals have contract periods of between 18 and 24 months with a typical monthly cost of £25 (US$37) to £40 (US$59). Since these contracts carry no upfront charge for with the laptop or the dongle, there is a significant level of risk for the retailer, according to Broadband Expert.

Webber adds: “[The] stringency of credit checks is an interesting barometer of the confidence retailers have in consumers meeting repayments with many only unwilling to extend these deals to those without a very good credit rating.”

Broadband Expert noted a substantial difference in rejection rates between companies offering these deals, with some having rejection rates of less than 1 in 2 whilst others turned away more than 3 in 4 customers.

Webber concluded: “These rejection rates demonstrate a different strategy with some companies prepared to take a more of a gamble to fill their order books and others choosing to play it safe by only targeting better off consumers they perceive as being low risk.”

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October, 2019

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