A quarter of a million BrightHouse customers will receive refunds after the Financial Conduct Authority ruled the firm had failed to treat them fairly.
The rent-to-own provider, which offers household goods to consumers on hire purchase agreements, failed to properly assess whether customers would be able to meet their monthly payments.
BrightHouse will be required to pay £14.8 million in compensation to around 249,000 customers, covering 384,000 separate lending agreements. Those affected will receive either cash payments or balance adjustments from the provider.
The FCA says the firm’s affordability assessments were inadequate, especially for those most at risk of entering financial difficulty.
The refunds will affect two groups of customers who were not properly treated by BrightHouse:
- customers who did not have their circumstances properly assessed during the loan process and have struggled to repay their loans. Those who handed their goods back will be refunded the interest and fees they paid, plus 8% interest as compensation. Customers who have retained their goods will have the remaining balance written off. This will cost the firm £10.1 million and covers 81,000 customers who took entered an agreement between 1 April 2014 and 30 September 2016
- customers who made a first payment to the firm for an order which was cancelled before the goods were received. This first payment was not returned to customers. These customers will have this first payment refunded, plus 8% interest as compensation. This covers agreements made after 1 April 2010 and will see a total of £4.7 million returned to 181,000 customers.
BrightHouse will write to all affected customers to outline the balance adjustment or refund they are due. The firm has also taken steps to improve its processes in future, including revising its late payment fees.
‘BrightHouse was not a responsible lender’
Jonathan Davidson, executive director of supervision – retail and authorisations at the FCA, says: “During the time in question, BrightHouse was not a responsible lender and failed to meet our expectations of firms in this sector. I am pleased that it has agreed to provide redress to those customers affected by these historic practices.
“This scheme continues our work with the rent-to-own sector to resolve the concerns we have previously identified.
“Responsible lending and the fair treatment of consumers, especially those in financial difficulties or who are vulnerable, are key priorities for us.”
Asked for a final balance to clear my account . Phoned up to clear balance was told I needed to give a weeks notice to clear the balance .Went into pay the balance the following week and was charged an extra £28.00 interest