BrightHouse to reimburse customers following FCA review

BrightHouse reimburse

BrightHouse has announced a customer redress scheme after a review by the Financial Conduct Authority (FCA) identified some of its legacy processes.

The news comes after the FCA confirmed in April that it was minded to authorise the rent-to-own electricals and furniture retailer, subject to specific conditions.

These conditions included restructuring its debt, carrying out more detailed assessments of customers’ incomes before allowing them to make a purchase, and sticking to the new business plan that was submitted to the FCA in March.

BrightHouse – owned by private equity firm Vision Capital – was targeted by the FCA over its controversial hire-purchase practises, such as alleged overcharging and hard-sell tactics targeting vulnerable consumers.

For example, last year it was revealed that its weekly installments system meant customers paid £1056 for a washing machine which retailed for £350.

Two groups of customers are included in the redress scheme which was developed following engagement with the FCA and independently reviewed.

The first group is those who, between April 2010 and April 2017, may not have received a refund of their initial payments when an agreement was cancelled within the first 14 days. These customers will receive an average payment of £27.

The second group consists of those who signed an agreement between April 2014 and September 2016 and where BrightHouse’s affordability assessments might not have been effective enough. These customers will receive an average payment of £147.

Alternatively, if the customer retained the product, then the ownership will be transferred to them.

The total value of the scheme to customers is £14.8 million.

This includes not only the cash repayments of £6.5 million but also the value of interest and fees on balances which have already been written-off in the normal course of business.

BrightHouse chief executive Hamish Paton issued an apology to those affected on behalf of the retailer.

“Our top priority is to ensure that they are reimbursed as soon as possible,” he said.

“We’re absolutely determined that this doesn’t happen again and have made significant improvements over the last 18 months.”

Customers affected do not need to contact BrightHouse.

By the end of the year personal letters will be sent to 213,000 past and current customers, explaining what they are due.

The retailer has also been under financial strain, battling to refinance £220 million of bonds that are due next year.

It recently enlisted Rothschild as an adviser and Vision Capital is expected to commence a formal sale process this month.

BrightHouse operates through 280 stores and rents out household items such as washing machines, fridges and furniture.

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  1. Brighthouse must seem like a licence to print money dressed up as a retail store!

    Their frankly dreadful business practice of charging insane amounts of interest to the sub primers of this country is disgusting!
    We all know that the sub prime market is risky, lending into sub prime is risky – however there is no need for vultures to use the vulnerability of the sub primer to make greater rewards than were needed.

    If you are a sub primer needing what most of us take as the basics of life like a washing machine, you have two options really. 1. you buy a second hand one and then try and save up for a new one. 2. you throw yourself on the mercy of Brighthouse and don’t realise that in 3 years you will have bought three new machines yet only had one delivered.

    In the industry the practice of ‘rolling together loans and interest should be stopped. People need to clearly know what their payments will be and not have the debt from one item rolled into another.

    After 20 years in the retail space I am still shocked that people in mainstream retail do not have their own in house ‘sub prime’ financing (mind you at the rates some retailers charge it feels like we all get the SP treatment).

    What we need is a wholesale change to consumer credit against goods, where goods are financed in stores or from catalogues / on lines. It should be fine for the retailers to charge their ‘interest’ on the goods until the initial principle loan amount is paid and this should then ratchet back to a smaller amount in a fee for credit. This fee is a fixed term amount so using the example of a £350 washing machine paid at £40 a month for the first 9 months and then a further £20 a month for 15 months – still making a very healthy profit for the retailer – but not crippling the sub primer to the point of additional financial crisis.

  2. I have a Pre owned SONY 55 INCH tv that cost £762.12 i have had this from 15 -10-2016 and im paying £17.52 be for that i had LG 49 INCH tv i was paying £598.74 at £9.50 a week and that went wrong so they gave me the 55 inch to replace the tv. We also have a Pre owned Hover 9 Kg £180.01 at £3.00 a week we also have had a SAMSUNG lap top of them we paid over a £1000 pounds for that . We are on bennfits so this is the only way we can get things we need for


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