Bright House under fire

Bright House is an electrical and household chain who offer a rent to buy scheme on their goods. During recessions, companies like Bright House thrived on the fact that people were struggling financially, so would target vulnerable consumers by offering attractive deals. These deals have very high interest rates attached though, with equally high initial mark up on the price of the goods themselves (as per http://blogs.thisismoney.co.uk/2012/02/thinking-of-shopping-at-brighthouse-stop-dont.html)

However, in recent years the Financial Conduct Authority (FCA) have clamped down on the hire-purchase sector, also known as rent-to-own, over alleged overcharging and hard-sell tactics targeting vulnerable consumers such as price cap that was put on payday loans in 2015. Part of the newer clamping down has been the imposing of new rules which mean they are obliged to carry out more rigorous checks on their customers’ finances before lending to them. These checks mean that more customers are being excluded or rejected, and others are having to wait so long to have the checks completed that they are leaving in frustration.

Naturally, it has meant a huge drop in profits for Bright House and made investors/bond holders rather itchy about whether their money is safe with debts of over £220 million owed to bond holders. These concerns by the investors have been amplified by further suggestions by the FCA that this industry could be hit with even more stringent regulations.

On an attempt to save the struggling chain, Bright House has won a ‘stay of execution’ from lenders, which will hold them off from paying their debts FOR NOW…

The legal aspect within this sector is always on the move and difficult to follow, but is rapidly being amended to protect the consumer from borderline ‘illegal’ agreements being made.

Watch this space for further developments on the new regulations that the FCA are looking to implement which will hopefully limit the immoral, abhorrent and extortionate deals that rent to buy chains offer.

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