BrightHouse in bid for favour with watchdog
ELECTRICALS rent-to-own retailer BrightHouse has put forward reform plans to the Financial Conduct Authority (FCA) in a bid to save its reputation with the watchdog.
The FCA is scrutinising a business plan from BrightHouse and will be deciding whether the retailer should be allowed to continue lending.
The retailer allows shoppers to pay for goods, such as furniture and other big-ticket items, in weekly instalments.
It has annual interest rates of up to 99.9 per cent.
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Temporary rules mean that BrightHouse must carry out more stringent checks on the credit history of its customers and is not allowed to charge them for late payments.
The FCA has been scrutinising the rent-to-own sector due to alleged overcharging and claims that it targets vulnerable customers.
The regulation has brought BrightHouse, which is owned by private equity firm Vision Capital, under financial strain.
In October, the business admitted that the affordability checks were damaging its business model and hurting profits.
Last week it said it would be closing 28 stores — or roughly 10 per cent of its store estate — due to rent pressures.
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The store closures put 150 jobs at risk, although BrightHouse boss Hamish Paton has said that the business will be working to secure jobs for the employees affected.
The business plan submitted to the FCA includes plans to launch an e-commerce site and measures to improve the handling of customer calls.
A BrightHouse spokesperson said the company “continues to have constructive dialogue with the FCA”.
It is thought the watchdog will reach a decision in the second quarter on whether BrightHouse should be denied a lending licence.