Rent-to-own firm BrightHouse has been ordered to pay £14.8m to 249,000 customers.

I correctly predicted that ‘rent-to-own firms’ would eventually be regulated in a similar way to payday companies. The Financial Conduct Authority (FCA) has launched a crackdown on high interest ‘rent-to-own’ firms and BrightHouse is the first high profile case which was widely reported in the media.

BrightHouse will compensate customers who had cancelled agreements after one down-payment but had not been refunded. It will also make payments to those who signed up to lending agreements that “may not have been affordable”.

The FCA said BrightHouse had not acted as a “responsible lender”. The firm, which lets customers pay for household items such as washing machines and televisions on a weekly basis, has been criticised for its business model.



A BBC investigation in 2016 conducted by Ed Miliband, the former Labour leader, highlighted the example of a £358 washing machine that ended up costing more than £1,000.

The investigation found that these firms were selling to vulnerable people. The FCA said that it was possible to have a price cap on rent-to-own goods being put in place.

BrightHouse has apologised to customers about failing to refund them.

There is no need for customers affected to contact BrightHouse. It will write to 213,000 current and former customers by the end of the year explaining what they are due.


There are many examples of customers being mis-sold goods. Not enough checks were being made to ensure that customers were able to afford the repayments with sky-high interest rates not being highlighted.

Customers whose deposits BrightHouse failed to refund that signed up between April 2010 and April 2017 will receive an average payment of £27.

The second group includes those who took out an agreement between April 2014 and September 2016. They will get an average of £147.

BrightHouse will pay back interest and fees along with compensatory interest of 8% if they return the goods for customers who were not assessed properly at the start of the loan who may have had difficulty making payments.

Those who kept the goods will have their balances written off.

FCA chief executive Andrew Bailey told Radio 5 Live the move set a “very important precedent – BrightHouse did not behave as responsible lenders and they failed to meet our expectations”.


Former staff have blown the whistle on their sharp practices. A Branch Manager who was employed from 2012 – 2016 in Yorkshire and London left because of “unacceptable” high-pressure sales techniques.

“In the early days, we did not ask people about their expenditure at all. We just checked what their income was. They changed that policy because the FCA came to investigate, asking for more stringent checks.

I can’t remember ever giving any money back to any customer. This is despite one of their policies that said if you cancel within 14 days you would get a refund. I know from several experiences that rarely happened, if ever”.


The Citizens Advice Bureau said it had helped more than 13,000 people with rent-to-own issues over the past 12 months, many of whom were struggling to make payments on essential goods such as fridges and washing machines.

“We’re pleased to see that the FCA are taking action against BrightHouse whose loose lending practices have pushed the very people who can least afford it further into financial difficulty”, said its chief executive, Gillian Guy.

The Citizens Advice Bureau said that it had found 1 in 5 rent-to-own customers spent 20% or more of their income on repayments, and more than 50% had to take on other debts to cover the costs.

It is asking that the same conditions apply to all forms of high-cost credit as the pay day loans cap, meaning that nobody would pay more than what they borrowed in interest and charges.


BrightHouse made profits of £162m last year, up from £63m in 2007-2008.

It is clear that this had come at a personal cost for some customers, with some having to prioritise repayments over food or heating.

The Chief Executive of BrightHouse has sincerely apologised to those affected and says, “We’re absolutely determined that this doesn’t happen again and have made significant improvements over the last 18 months”.

The firm said it had overhauled its application process to ensure future loans were affordable and that customers were treated fairly during the collections process.

Call me cynical, but if consumer programmes and charities had not shone a spotlight on these vultures nothing would have changed. It is a damning indictment on society that these outlets and food banks are flourishing year on year.

What are your thoughts on ‘rent to own’ firms? Have you used one? If so, what was your experience?

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