Rent-to-own company BrightHouse has agreed to pay £14.8 million to 249,000 customers after the Financial Conduct Authority said it did not act as a “responsible lender”.
The retailer will compensate customers who signed up to agreements that “may not have been affordable” or customers who cancelled agreements after a downpayment but had not been refunded.
“We sincerely apologise to those customers who were affected. Our top priority is to ensure that they are reimbursed as soon as possible,” said BrightHouse chief executive Hamish Paton.
“We’re absolutely determined that this doesn’t happen again and have made significant improvements over the last 18 months. The FCA recognised this when they confirmed in April that they are minded to authorise our business, subject to specific conditions.”
Those customers who have been affected will not have to get in touch with BrightHouse. The firm will send personalised letters to customers, which will explain what they are due.
The company has been working with the UK financial watchdog since 2014 to protect those customers who are at higher risk of falling into financial instability.
The FCA said BrightHouse has improved its lending application assessment and now ensures loans are affordable and customers are treated fairly.
“During the time in question, BrightHouse was not a responsible lender and failed to meet our expectations of firms in this sector,” said Jonathan Davidson, executive director of supervision at the FCA.
“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.”