The largest rent-to own company in the UK, BrightHouse, has recently announced that it is set to close a number of its stores, as it struggles to cope with increased regulatory scrutiny of its business practices.
Commenting on this development, CfRC Director, Damon Gibbons, said:
“The recent announcement that BrightHouse is set to close 28 of its stores is good news. BrightHouse have been exploiting low income households for years. We have heard first hand from former customers who have told us of their poor treatment. It remains to be seen whether the Financial Conduct Authority (‘FCA’) will ensure that borrowers will be fully compensated for BrightHouse’s past failings, which included their insistence that people take out very high cost insurance policies as part of their credit agreement. Action on that front is long overdue. If, as it should, the FCA insists on BrightHouse putting in place a significant redress scheme then this could make it difficult for the company to raise finance and, combined with tougher requirements concerning future lending practices, feasibily threaten its future.
The Centre for Responsible Credit’s position is crystal clear. We would shed no tears if BrightHouse were to collapse. But we recognise that people need alternative options. That’s why we have been proud to support the development of Fair for You. Fair for You is a national, not for profit, lender which doesn’t just deliver much more affordable credit than the rent to own stores, but also treats its customers with the respect they deserve. We’ve spoken to their customers, and we know what a fantastic service they provide. Time and again, they’ve ranked them 10 out of 10 for price and for customer service – including when people have struggled financially and needed to reschedule payments. As a result, many told us that they are now much better able to pay other household bills, and are far less stressed about their financial circumstances in general.
As BrightHouse comes under further pressure – and hopefully continues to recede from our high streets – we need to make sure that more and more people are made aware of the fantastic alternative that Fair for You provides.”
Our previous research into the social impact of Fair for You – which was based on detailed interviews with its customers is available here.