MPs to investigate rent to buy retailers
BrightHouse, the market leader in the rent to buy furniture and electricals sector, is to be investigated by a group of MPs.
The all-party parliamentary group on debt and personal finance will look at the 'very high' cost of buying from Brighthouse and its rivals and if consumers need better protection.
'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,' says Yvonne Fovargue MP, who chairs the group.
The group, which is not a select committee, will take written and oral evidence until early November and issue its findings in the middle of December.
BrightHouse charges up to 69.9% APR on its products.
In its call for evidence, the group of MPs says: '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.'
BrightHouse owner Vision Capital is considering a flotation of the chain, which made underlying profits of £52m from sales of £333m last year. It has 270 branches and plans up to 400.