Weekly payment firm BrightHouse is to pay out £14.8 million in compensation and refunds after a financial watchdog ruled the company had treated its customers unfairly.
The company, which has a store in Albion Walk, in the Intu Derby shopping centre, has agreed to pay 249,000 customers for unaffordable lending and payments which should have been refunded.
The Financial Conduct Authority (FCA) said that BrightHouse had failed to be a ‘responsible lender’ and had not always delivered good outcomes for customers, particularly for those at higher risk of falling into financial difficulty.
The payments related to 384,000 agreements between April 2010 and September 2016. BrightHouse is a hire-purchase, or rent-to-own firm, that allows people to pay for goods such as televisions and washing machines on a monthly basis.
BrightHouse has a store in the Intu Derby shopping centre
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.
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“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.”
I’m a BrightHouse customer – what should I do?
Customers won’t need to take any action as BrightHouse (a trading name of Caversham Finance Limited) will contact all those affected and notify them if they are due a refund.
Will I get a refund or compensation?
The firm will pay out to customers in two sets of circumstances
1) Customers whose circumstances have not been assessed properly at the beginning of the loan to determine whether they could afford it and may have had difficulty making payments. Customers who handed back the goods will be paid back the interest and fees charged under the agreement, plus compensatory interest of 8%. Customers who retained the goods will have their balances written off. This redress totals around £10.1 million for 114,000 agreements entered into between 1 April 1, 2014 and September 30, 2016, covering 81,000 customers.
2) Customers who made the first payment due under an agreement with the firm which was cancelled prior to the delivery of the goods. This first payment was not returned to all customers. BrightHouse will refund this first payment plus pay compensatory interest of 8%. This redress totals around £4.7 million for 270,000 agreements entered into after April 1, 2010, covering 181,000 customers.
Source: Derby Telegraph