Store customers to get £14.8m payout
BRIGHTHOUSE TOLD THEY HAVE TO GIVE 249,000 PEOPLE COMPENSATION
BRIGHTHOUSE is to pay out £14.8m in compensation after a financial watchdog ruled the company had treated its customers unfairly.
The weekly-payment firm, which has more than a dozen stores across Greater Manchester, had agreed to pay 249,000 customers for unaffordable lending and payments which should have been refunded.
The Financial Conduct Authority (FCA) said BrightHouse had failed to be a ‘responsible lender,’ and had not always delivered good outcomes for customers – particularly those at higher risk of falling into financial difficulty.
The payments related to 384,000 agreements which began between April 2010 and September 2016.
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 it 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.
“Responsible lending and the fair treatment of consumers, especially those in financial difficulties or who are vulnerable, are key priorities for us.”
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. The firm will pay out to: 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 eight per cent. Customers who retained the goods will have their balances written off. This redress totals around £10.1m for 114,000 agreements entered into between 1 April 2014 and 30 September 2016, covering 81,000 customers.
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 eight per cent. This redress totals around £4.7m for 270,000 agreements entered into after 1 April 2010 covering 181,000 customers.