BrightHouse to be investigated
BrightHouse - the company that allow you to 'rent to own' tellies, furniture and other stuff - have been flogging their wares to low income households for a while now. However, all is not rosy and they're about to be investigated by an all-party parliamentary group.
The investigation is badly timed for the company as they only just appointed some advisers to prepare for a stock market float.
So what's the problem? Well, the inquiry will look at the huge costs for people on low incomes who use the business to get sofas and other electrical goods. The feeling is that there could be better protection for consumers.
BrightHouse have been making a pretty penny too, with underlying profits of £52m on turnover of £333m in 2013.
The all-party parliamentary group on debt and personal finance is chaired by Labour MP, Yvonne Fovargue who said: "Rent to own outlets have become an increasingly common sight on our high streets in recent years. But despite this, there is little general understanding of how they operate and how they differ from conventional shops. Our inquiry will look in detail at the products and services they offer and will ask whether customers are getting a good deal."
It isn't just BrightHouse - companies like PerfectHome and Buy As You View will also be looked at.
The parliamentary group said: "Consumer groups have pointed out that the overall costs for the customer are very high. This is partly because the price of the products themselves can be high, but also because customers can be obliged to take on a ‘bundle’ of services at the time of the initial credit agreement, including delivery and insurance cover."
"It has been questioned whether this amounts to good value for money for the customer, with some consumer groups arguing that the consumer should be protected from such contracts. The inquiry will look at a number of issues around how the market is working … and will ask whether more needs to be done, from a regulatory point of view, to ensure that customers get a good deal."