by Peggy Walton, Staff writer
From the January 26, 1994 edition of The New Castle Record
Craig County folks need to take a look at the fine print before signing a contract for a new television system which could lead to a decade of monthly payments at an percent interest rate.
Residential Cable company, based in Knoxville, Tenn., installs fixed reflector units in areas where standard cable service is not available. The unit is not a movable satellite dish, but a stationary reflector which allows the cable customer to receive satellite programming at wholesale prices. Several of the company’s reflector units have already been installed in the county, said Wayne Creasy, former service manager with Residential.
Creasy said the reflector provides quality satellite programming, but costs a great deal in the long run if the customer decides to pay for the system bit by bit over the years.
Financing is supplied through household Retail Services, Inc., which extends the customer a $3,700 credit line, then allows him or her as long as it takes to pay off the balance. The customer is required to pay $49 a month, with about 18.9 percent interest added to the remaining monthly balance, said Residential President Buddy Warren.
“The financing we provide is flexible,” Warren said.
There is no down payment, and the customer can choose to pay off the system as soon as possible or over a period of several years. After one year the customer pays for his or her own programming, which runs about $23 per month, Creasy said. This can be added to the required monthly payment of $49, or the customer nay choose to lump the extra $23 in monthly programming costs into the remaining total balance.
Since the interest rate on the overall balance is close to 20 percent, however, the customer could end up paying three times the original purchase price of the system and programming over a number of years, according to the Better Business Bureau.
“Sometimes people just don’t sit down and figure this out,” said Fran Stephens, executive director of the better Business Bureau’s Roanoke branch. “They don’t’ realize what they’re buying.”
Creasy, who used to install the reflector units for Residential before the company closed its branching Lynchburg, said customers are not being told the whole truth about how long it could take top pay off the system.
“Forty-nine dollars a month doesn’t sound bad,” Creasy said, “but it takes years to pay off the system. You’re gonna be paying on this for a long time-much longer than it lasts.”
Warren said customers can choose to pay for the system through Household Retail Services, Inc. or they can seek other financing which would not be so costly should they decide to take their time paying off the thousands of dollars the system costs.
“If they can get a better interest rate at the banks, then they should do that,” he said. “We do offer alternative financing.”
The Better business bureau urges county residents to check the company’s financing rate and the actual cost of the system before purchasing it. Stephens said the Bureau has received several comments and inquires from people who didn’t realize how many years they would have to make $49 monthly payments before they actually owned the system.
“They haven’t been smart enough to not sign the contract,” Stephens said.
