Blaenau Gwent MP calls for more hire purchase regulation

A Welsh MP is calling for tougher rules on hire purchase agreements after retailer BrightHouse was told to pay £14.8m back to its customers.

Nick Smith, MP for Blaenau Gwent, has been calling for more regulation in the rent-to-own sector in parliament.

The Financial Conducts Authority (FCA) told BrightHouse they must pay back 249,000 customers who were not refunded after cancelling agreements.

Mr Smith said the verdict showed the system was not "fair and affordable".

"This is about families struggling to get by facing no other option than eye-watering mark-ups 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."

BrightHouse has 21 outlets in Wales, and was told by the FCA it had not acted as a responsible lender.

Customer Dawn North from Port Talbot said interest rates were too high, but hire purchase items could be the only way for people on low incomes to afford goods.

She said: "It did cause problems for me. If I missed a payment you had to pay that one and the following week's payment which, if you're on benefits is a lot of money, and you had charges as well sometimes.

"It's an ideal situation if you're struggling and you need a washing machine or a cooker, it's a good way of getting one, but they need to monitor it better and say you have this one item and you pay for that.

"I think the interest is astronomical but beggars can't be choosers, you do what you can if you're on a low income.

"[The cap] is a brilliant idea because some of it is such a high interest. Other companies don't do it so why should BrightHouse get away with it?"