Rent-to-own retailer BrightHouse ordered to pay £14.8m to customers for irresponsible lending

BrightHouse: The rent-to-own firm failed to meet the FCA standards

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Ella Wills24 October 2017

Rent-to-own firm BrightHouse has been told to pay out £14.8 million to 249,000 customers after the financial watchdog said the company had not acted as a “responsible lender”.

The compensation is linked to 384,000 customer lending agreements which "may not have been affordable" and payments "which should have been refunded", the Financial Conduct Authority (FCA) said.

Brighthouse, which allows customers to pay for household goods such as televisions on a weekly basis, has been under the watchful eye of the FCA since 2014.

The regulator then said the firm’s lending assessment and collections processes were not up to standard.

BrightHouse has apologised, and said it is committed to “putting things right” for customers who may have been treated unfairly by its processes.

The company will be making repayments to two groups of customers. The first are those who took out an agreement between April 2010 and April 2017 and either cancelled their agreement within a two-week period or did not take delivery of the goods.

The second group are customers who took out an agreement between April 2014 and September 2016 and were not properly assessed on whether they could afford repayments.

BrightHouse will refund all payments made under the agreement to the first group, plus compensatory interest of eight per cent. They will also refund interest and fees paid, plus compensatory interest of eight per cent to the second group – providing customers returned the product to BrightHouse.

The company said there is no need for customers affected to contact them, adding it will write to all affected customers - some of whom are affected by both sets of circumstances - to explain the refund or balance adjustment that they will receive.

Jonathan Davidson, executive director of supervision 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."