Brighthouse: Is Rent-To-Own A Risk?

BrightHouse was recently ordered to pay almost £15 million in redress to customers after discussions with the Financial Conduct Authority (FCA), after the Rent-to-Own (RTO) firm was deemed to be falling short of responsible lending standards and failing to treat its financially vulnerable clients fairly. BrightHouse provides a range of household goods on Hire Purchase (HP) agreements, at relatively high rates of interest. It has also been reported that many of its customers are on state benefits.

The decision underlines the need for careful legal and regulatory advice to ensure compliance with the FCA's stringent requirements in this area.

Consumer credit businesses such as BrightHouse had to reapply for authorisation to carry on their business after the FCA took over as regulator from the Office of Fair Trading (OFT) in 2014. The financial watchdog reported in 2016 that this process was still ongoing for the three major RTO lenders, including BrightHouse. The FCA