Tuesday, December 2, 2008

Laptop-inclusive deals only for the credit-worthy

Mobile broadband has seen exponential growth in 2008, yet in the face of the credit crunch mobile providers and retailers are turning away 50% of their business due to very stringent credit checks. During October and November UK based broadband comparison site Broadband Expert has witnessed that on average half of the sales sent to retailers offering a mobile broadband and free laptop deal were rejected after running a credit check.

Broadband Expert Commercial Director Rob Webber believes certain retailers and mobile providers are being overly cautious, "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 sees 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 cannot 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 to £40. Since these contracts carry no upfront charge for with the laptop or the dongle, there is a significant level of risk for the retailer. Webber believes 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".

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