The Financial Conduct Authority has recently found out that the weekly payments store BrightHouse had treated some of the customers unfairly, which is why it is now due to pay £14.8 million to compensate for such service. It has been reported that some customers will get to have their loans written off, while others will be handed back cash. The exact number of customers who are waiting for BrightHouse store to pay them back has been estimated to be 249,000.
According to the Financial Conduct Authority (FCA), BrightHouse has not been a “responsible lender.” There are two sets of customers for whom BrightHouse has proposed redress. Firstly, there are the ones who “weren’t assessed properly when the loan was taken out to make sure they could afford it (81,000).” If they decided to hand back the goods, the store will pay them back the fees and the interest of 8%. For those who kept the goods, the store will write off their balances. Secondly, some customers had already made the first payment before the goods were delivered, and then the agreement under which they did it was canceled (181,000). In those cases, BrightHouse is due to refund the first payment plus the interest of 8%. The compensation for the first set of customers has been estimated to be £10million, while for the second one it’s £4.7million.
For instance, in 2013, 29-year-old Jade Rysdale bought a Samsung TV, but it was only one year later that the TV broke down. It turned out that BrightHouse didn’t have the TV she had ordered in stock, so they gave her a cheaper model but charged the more expensive one. Jade Rysdale explained that she hadn’t realized what had happened immediately: “I was pregnant with my second child and I’d split up with my boyfriend. I didn’t have anything to go back to. I couldn’t get credit. I had no job. I needed to get something.” She also added: “You search Google and it’s the first thing that comes up.” All in all, she eventually paid £900 for the TV plus £520 for the replacement.
The director of supervision at the FCA Jonathan Davidson concluded that it is still good news that BrightHouse will provide redress to the unfairly treated customers. “I am pleased that BrightHouse 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,” he said, adding that “Responsible lending and the fair treatment of consumers, especially those in financial difficulties or who are vulnerable, are key priorities for us.”
Finally, the company itself apologized on its official website saying: “Having reviewed our past business, we have identified two historic issues that have led to our announcement about repayments to some of our customers. We are sorry this has happened. We will contact all customers included in the programme by personal letter before the end of the year.”