AN MP has hit out at so called 'rent-to-own' firms, accusing them of '"misleading" customers.
The companies allow items such as furniture, household appliances or electronics to be bought on finance, with customers paying in instalments.
Although this allows customers to spread out the cost of expensive items such as washing machines, interest rates charged by the companies mean they ultimately end up paying more than they would have had they bought the item outright.
Blaenau Gwent MP Nick Smith wrote to the Financial Conduct Authority (FCA), which regulates businesses offering financial services, in September after spotting a Beko electric cooker in a BrightHouse shop in The Walk shopping centre in Ebbw Vale labelled with "weekly payment from £4.50 a week".
The Labour MP said he was concerned this was misleading around the amount customers would ultimately have to pay.
Although the FCA has not confirmed it has taken action, the £4.50 price tag is now not prominently advertised.
Mr Smith said: “The interest rates are still eye-watering, but this is a step in the right direction.
"At least now it’s clearer what people are signing up to.”
He added: "Particularly at Christmas families need to be sure the price tag won’t be going up and up and that that one thing they bought for what seemed to be a bargain doesn’t end up eating into their monthly budgets."
Mr Smith has also called for an interest rate cap to be imposed on BrightHouse and similar firms.
“Let’s make sure we do the right thing by struggling families trying to provide a decent home for their kids,” he said.
The FCA is due to issue a consultation paper on the sector early in 2018.
A spokeswoman said: "We welcome all information from consumers and their representatives that help us achieve our objectives."
BrightHouse could not be reached for comment.
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