A rent-to-own company which has stores across Scotland has committed to pay around £15m to 249,000 customers following discussions with the Financial Conduct Authority (FCA).
BrightHouse, with over 300 stores in the UK serving more than 280,000 customers, will be paying more than £14.8m (in the form of cash payments and balance adjustments) in respect of 384,000 agreements for lending which may not have been affordable and payments which should have been refunded.
BrightHouse (a trading name of Caversham Finance Limited) is a rent-to-own firm which provides household goods to customers on hire purchase agreements.
A statement on the FCA website says: “BrightHouse has been working closely with the FCA since late 2014 as we identified that the firm’s lending application affordability assessment processes and collections processes did not always deliver good outcomes for customers particularly those who were at a higher risk of falling into financial difficulty.
“In response to these concerns BrightHouse has undertaken an extensive programme of work to improve its lending application assessment to ensure that loans are affordable and customers are treated fairly throughout the collections process, including revising its late payment fee structure.
“In addition, BrightHouse has identified customers that may have been treated unfairly where its processes fell short of FCA expectations and has committed to putting things right for these customers.
Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA said: “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.”
A BrightHouse statement said: “We are sorry this has happened. Customers do not need to contact BrightHouse. We will contact all customers included in the programme by personal letter before the end of the year.”
Repayments will be made to the following customers:
Customers who took out an agreement with BrightHouse between April 2010 and April 2017 and then either cancelled the agreement within the 14 day cooling off period, or did not take delivery of the goods, and did not receive a refund of any payments made. In these cases, we will refund all payments made under the agreement.
Customers who took out an agreement between April 2014 and September 2016 and where we have identified that our checks may not have effectively ensured that customers could afford the repayments. Where customers returned the product to BrightHouse, we will refund the interest and any fees paid under the agreement.