ABCUL comments on FCA ordering BrightHouse to repay 14.8 Million to customers unfairly charged
27 Oct 17
This week the news broke that rent-to-own retailer, BrightHouse, has been ordered by the Financial Conduct Authority (FCA) to repay £14.8 million to compensate almost 250,000 customers. The FCA has said Britain’s biggest rent-to-own retailer “has not acted as a responsible lender” treating customers unfairly.
The action from regulators comes following a great deal of evidence submitted to it from consumer advocates like Citizens Advice which supported more than 13,000 people who were facing difficulties after borrowing from BrightHouse last year. Issues highlighted by FCA and for which compensation will be paid include a failure to assess affordability before lending and a lack of protection for consumers who part pay for goods and have no ownership rights over goods.
Matt Bland, ABCUL Head of Policy, said: “We are happy to see the FCA are taking action against BrightHouse for historical bad practices and mistreatment of its customers. The credit union sector has long supported their members to borrow affordably for household goods and many of our members work personally with those directly affected by the bad practices of BrightHouse and other high cost lenders that can often push them into financial distress. We hope that the FCA actions further continue to improve standards in the rent to own sector and support the wider high-cost credit review which it is currently undertaking.
“We would also like the FCA to look at ways in which its regulation of credit unions could be used to promote their role as an alternative to high-cost credit like rent-to-own. While we appreciate that the regulatory regime for credit unions is proportionate and great efforts have been made to support this, there are certain areas in which more flexibility from the FCA could boost credit union growth and allow credit unions to be more competitive and help more people in society.”