BrightHouse announce it is to close 10% of its stores across the UK.
BrightHouse is to close 30 of its high street stores. Unfortunately the Burnley store looks like it may stay open. The rent-to-own company provides household items such as televisions, cookers, washing machines and furniture on a high interest pay-weekly hire purchase agreement.
BrightHouse has come under pressure in recent times, with the Financial Conduct Authority (FCA) last year announcing plans to cap the amount of interest that rent-to-own retailers charge customers, after investigations found that some customers were paying up to four times the average retail price due to high interest payments on items.
In October 2017 they were also ordered by the FCA to redress some 250,000 customers £14.8 Million, when the FCA found the credit checks and collections processes were not up to its expectations.
Andrew Bailey, CEO of the Financial Conduct Authority, recently outlined the aim of the proposed caps
Today’s measures are designed to bring down very high prices in the rent-to-own sector, which is used by some of the most financially vulnerable in our society. We believe a cap is the only intervention that will effectively tackle the highest prices. If implemented it will save consumers up to £22.7m a year from excessive charges.
There is little joy for the BrightHouse employees that face redundancies, however it is hard to shed a tear for the company when people in the Burnley and Pendle communities have been purchasing items with representative interest rates of 69.9%APR, with some items attracting interest rates as high as 99.9%APR.
The FCA rent-to-own proposals should come into effect from the 1st April. They include the recommendation that the pay-weekly stores should benchmark the cost of products against the price charged by three other retailers. This will hopefully stop members of our community, who feel forced to use the rent-to-own companies, being hit with a double whammy of overpriced household items which are then compounded by eye watering rates of interest.
