Rent-to-own provider BrightHouse to provide over £14.8 million in redress to around 2

[Legal Beagles]

Following engagement with the FCA, BrightHouse has committed to pay over £14.8 million (in the form of cash payments and balance adjustments) to 249,000 customers in respect of 384,000 agreements for lending which may not have been affordable and payments which should have been refunded.

https://www.fca.org.uk/news/press-re...9000-customers

[Amethyst]

Re: Rent-to-own provider BrightHouse to provide over £14.8 million in redress to arou

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Following engagement with the FCA, BrightHouse has committed to pay over £14.8 million (in the form of cash payments and balance adjustments) to 249,000 customers in respect of 384,000 agreements for lending which may not have been affordable and payments which should have been refunded.




BrightHouse (a trading name of Caversham Finance Limited) is a rent-to-own firm which provides household goods to customers on hire purchase agreements. BrightHouse has been working closely with the FCA since late 2014 as we identified that the firm’s lending application affordability assessment processes and collections processes did not always deliver good outcomes for customers particularly those who were at a higher risk of falling into financial difficulty.


In response to these concerns BrightHouse has undertaken an extensive programme of work to improve its lending application assessment to ensure that loans are affordable and customers are treated fairly throughout the collections process, including revising its late payment fee structure.


In addition, BrightHouse has identified customers that may have been treated unfairly where its processes fell short of FCA expectations and has committed to putting things right for these customers.


The firm has proposed redress for customers in two sets of circumstances:

• customers whose circumstances have not been assessed properly at the outset 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 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 8%. This redress totals around £4.7 million for 270,000 agreements entered into after 1 April 2010 covering 181,000 customers.

BrightHouse will write to all affected customers, some of whom are affected by both sets of circumstances, to explain the refund or balance adjustment that they will receive. Customers do not need to take any action until they are contacted by BrightHouse.


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.


“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.”



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[EXC]

Re: Rent-to-own provider BrightHouse to provide over £14.8 million in redress to arou

From their recently filed accounts.



https://s3-eu-west-1.amazonaws.com/d...d68o4oe7zwU%3D

[Amethyst]

Re: Rent-to-own provider BrightHouse to provide over £14.8 million in redress to arou

The FCA are doing a pretty fine job IMO. Scary that Brighthouse say new signups have halved because of stricter affordability criteria. They did throw overpriced goods at people on ridiculous terms and interest rates previously though. Suprised there's such a low number of refunds due tbh.

Here's Brighthouse Info page

https://www.brighthouse.co.uk/fca-statement

Customers who took out an agreement with BrightHouse between April 2010 and April 2017 and then either cancelled the agreement within the 14 day cooling off period, or did not take delivery of the goods, and did not receive a refund of any payments made. In these cases, we will refund all payments made under the agreement.

Customers who took out an agreement between April 2014 and September 2016 and where we have identified that our checks may not have effectively ensured that customers could afford the repayments. Where customers returned the product to BrightHouse, we will refund the interest and any fees paid under the agreement.

Some how that first paragraph sounds much worse the way Brighthouse have put it. How the hell did they get away with that for 7 years?

Where an agreement was either terminated in its’ cooling off period, or you never took delivery of the goods, and you did not receive a refund when you should have done, we are refunding all payments made to us under the agreement.

To compensate for any inconvenience this may have caused customers, we have increased our payment by adding 8% annual interest. However, by law, we have had to deduct 20% income tax on this interest to pay HM Revenue and Customs (HMRC) directly on behalf of our customers.

Do they? I thought that was down to the customers, IF they pay tax, which, tbh, many of their customers won't even be over the lower tax bracket. Or am I reading that wrong?

Ahhh

Can I claim a refund for the income tax deducted?
Depending on your financial circumstances you might be able to claim a refund of the income tax deducted from our payment to you. To do this, you will need to call the HMRC helpline on 0300 200 3300 to obtain further advice. HMRC is legally obliged to help you pay the correct amount of tax and will help you make the claim for the refund due to you. You should have your national insurance number ready when you call this number to identify yourself, and have the Certificate of Deduction of Income Tax at hand, which is included in this letter. This is your evidence of the tax deducted and we advise you keep it in a safe place. You can find more information on HMRC’s website: https://www.gov.uk/claim-tax-refund/overview

Yeah like that's going to happen. Quite jammy of the HMRC to get it done that way round and rely on people claiming it back.