BrightHouse to pay £14.8MILLION in compensation to 249,000 customers
RENT-TO-OWN firm Brighthouse has been ordered to pay hundreds of thousands of customers £14.8MILLION in compensation after the financial watchdog found that it had treated them unfairly.
Some customers will have the loans written off, while others will be handed back cash due to the investigation.
In total the rent-to-own firm, which takes weekly payments from customers, must pay back 249,000 customers.
Customers won't need to take any action as BrightHouse will contact all those affected and notify them if they are due a refund.
The City watchdog, the Financial Conduct Authority (FCA), said BrightHouse had not been a "responsible lender" and had failed to meet its expectations.
Brighthouse has proposed redress for two sets of customers:
- Those whose circumstances weren't assessed properly when the loan was taken out to make sure they could afford it. Customers who handed back the goods will be paid back the interest and fees charged plus interest of 8 per cent. Customers who kept the goods will have their balances written off.
- Customers who made the first payment under their agreement which was then cancelled before the goods were delivered. This first payment was not returned to all customers and BrightHouse will refund this payment plus interest of 8 per cent.
The compensation bill for the first set of customers is set to be more than £10million affecting 81,000 customers, while the bill for the second is set to be around £4.7million, affecting 181,000 customers.
Mum-of-two Jade Rysdale could be one of the hundreds of thousands of customers due back cash from Brighthouse.
The full-time mum, who lives in Devon, has been a customer of Brighthouse for over four years.
In 2013, she bought a Samsung TV through the firm but after a year it stopped working. Brighthouse replaced the model with a cheaper telly as they did not have her original one in stock.
But the single mum did not realise that she'd signed up to an entirely new contract.
She said: "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."
Jade added: "You search Google and it's the first thing that comes up."
Have you been contacted by BrightHouse about compensation? Email [email protected]
In total, the single mum paid around £900 for the faulty TV. She also paid around £520 for the replacement TV which was then sent back.
She has not received a refund for either of the items.
Jade also had a separate contract for a tumble dryer which she had to send back as she was unable to meet the repayments.
She is in the process of paying back a three-year loan for two sofas.
"It's horrible. I wish I'd never done it but at the time I had no choice", she added.
Jade is one of the hundreds of thousands of customers who may be eligible for a refund from the firm.
Brighthouse charges customers around 70 per cent for buying furniture, electricals and other home items over a payment periods spanning up to three years.
Jonathan Davidson, director of supervision at the FCA, said: "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.
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“Responsible lending and the fair treatment of consumers, especially those in financial difficulties or who are vulnerable, are key priorities for us.”
In a statement on its website, BrightHouse apologised and said those affected will be notified by the end of 2017.
"Having reviewed our past business, we have identified two historic issues that have led to our announcement about repayments to some of our customers," it said.
"We are sorry this has happened. We will contact all customers included in the programme by personal letter before the end of the year."
ARE YOU DUE COMPENSATION FROM BRIGHTHOUSE?
A total of 249,000 customers are due compensation or some form of redress from the rent-to-own firm.
These include:
- Customers who took out an agreement between April 2010 and April 2017 which was cancelled in the cooling-off period or did not recieve the goods and no refund payments were made.
- Customers who took out an agreement between April 2014 and September 2016 and affordability checks showed they may not have been able to afford payments. If customers returned the product to BrightHouse it will refund the interest plus any fees.
Refunds will be calculated depending on individual circumstances. Customers will get 8 per cent annual interest on top of any payments which are refunded.
Payments will be sent via cheque to customers who BrightHouse has identified as needing a repayment.
It has set up a freephone number 0800 526 069 which can be called between 8am and 8pm Monday to Friday, or 8am to 5.30pm on Saturday for customers to call if they are worried that their details have changed. They cannot confirm whether you will receive a payment or not.
If you are or were a BrightHouse customer and you have moved or your details have changed you can call them on this number to check if you're affected.
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