Rip-off firm to repay £15m

A RENT-to-own retailer accused of rip- off charges has been forced to pay nearly £15m in compensation to hard-up customers by the City watchdog.

Brighthouse, which sells items such as fridges and TVs to families who pay a monthly fee, will pay £14.8m to 249,000 shoppers.

The Financial Conduct Authority ruled that the business failed to properly assess how much buyers were able to repay – particularly those at high risk of facing financial difficulties.

The watchdog said 81,000 customers’ circumstances were not properly assessed between April 2014 and September 2016, meaning they may have had difficulties making payments.

Those who were forced to hand back their goods will get the interest and fees they were charged repaid, plus compensatory interest of 8pc, while those who kept their items will have what they owe written off. This will cost Brighthouse a total of £10.1m.

Another 181,000 made an initial payment, cancelled their contracts before receiving their items and were not refunded from April 2010 onwards. They will get this first payment back along with compensatory interest of 8pc, coming to £4.7m.

Brighthouse charges punishingly high interest rates of 69.9pc APR – meaning the goods are far more expensive in the long run.

FCA director Jonathan Davidson said: ‘During the time in question, Brighthouse was not a responsible lender.’

Brighthouse chief executive Hamish Paton said: ‘We sincerely apologise to those customers who were affected. We’re absolutely determined that this doesn’t happen again.’