A BOLTON furniture firm has agreed to stop advertising interest-free credit deals after being warned by a government watchdog.

The Office of Fair Trading (OFT) warned Gregory and Porritts Furnishings in Knowsley Street after ruling its interest-free credit deals could counter consumer protection laws.

The OFT said the terms of its credit agreements required customers to pay off a lump sum at the end of the one-year interest-free period, but interest for the entire period of the loan if the lump sum was not paid off in full.

A spokesman said: "The interest-free period was only if you were to pay off the entire balance of the product within a specified time. If you missed that by one day you would end up paying interest over the full period of the deal.

"You were effectively having to pay a lump sum to get the deal."

Fair trading chiefs can now apply for court orders to ensure businesses do not breach consumer protection laws.

Three other furniture and carpet companies, including giants Allied, received similar warnings and have all agreed to stop advertising interest-free credit deals.