Nick Smith MP Labour MP for Blaenau Gwent
Nick Smith MP has welcomed the news that BrightHouse has been told to pay £14.8m back to customers -; and is calling for further crackdowns on the industry.
The Blaenau Gwent MP has been campaigning for months for more regulation in the rent-to-own sector, including calling for a cap to be considered on sky-high interest rates.
The Financial Conducts Authority has told BrightHouse they will have to compensate 249,000 customers who cancelled agreements after one down payment with no refund.
They will also have to make payments to those who signed up to lending agreements that they may not have been able to afford.
Mr Smith, who has been pursuing the issue of high-cost credit in Parliament, said this was welcome news for customers who weren’t given a fair deal.
“This is about families struggling to get by facing no other option than eye-watering markups under the guise of small weekly payments”, he said.
“When companies like BrightHouse can set up shop in places like Ebbw Vale and sell a £280 cot for £780, that just isn’t right.
“This verdict pokes a hole in the myth that families know they are committing to something that’s fair and affordable.
“I hope the FCA now follow up this verdict with more action to regulate the sector and make it a valuable but responsible one.”
Mr Smith is also currently asking the FCA to look at how goods are advertised in shops such as BrightHouse.
Goods are regularly displayed with large headline figures of small weekly payments, accompanied by a separate smaller wall of text for the true cost.
“With manufacturers’ codes changing from business to business, it can be difficult enough to see if you’re getting a good deal,” he said.
“We need to honestly ask ourselves if having real costs in the fine print and the most flattering figure as the star attraction gives customers a fair chance to consider what they are doing before they commit.”