Rent-to-own firm BrightHouse filed for bankruptcy last year, but 11,000 customers yet to receive compensation may be left with nothing, says a new report
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Thousands of customers of failed rent-to-own BrightHouse are unlikely to get their money back, administrators have warned.
BrightHouse offered loans for expensive items like appliances and sofas, which consumers then used to pay back Interest rate of up to 99.9% .
In 2017, BrightHouse was ordered to pay back £14.8million to customers after the Financial Conduct Authority (FCA) found it had treated customers unfairly.
BrightHouse administrator Grant Thornton had earmarked £600,000 to deal with 11,000 abusive sales claims. reports the Guardian .
But the future of this £600,000 pot is now in question – and any compensation for the outstanding 11,000 customers.
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According to a report by Grant Thornton on BrightHouse, “Given the likely significant size and complexity of customer affordability claims…administrators anticipate that the costs associated with evaluating these claims would far exceed the funds available for distribution.”
BrightHouse went into administration in 2020.
Earlier in the year it was paying out around £1million a month in claims for damages, with executives believing the eventual toll could be far higher.
In 2019, it announced 30 store closures, a tenth of the company’s stores.
Last month, The Mirror reported that Provident missold customers who had loans get refunds from July – but only for less than 10% of what is owed to them.
The doorstep lender confirmed that redress payments are owed for the fees and interest charged to them down to just 4p to 6p per £1.
This applies to those who missold loans from Provident and its Satsuma, Glo, and Greenwood sub-brands between April 2007 and December 17, 2020.
Provident Financial Group had around 4.2 million customers during that period, but it’s unclear how many refunds are due or what the average number will be.
The loan company has capped the total refunds it will make under a scheme called the ‘Scheme of Arrangement’ at £50million.
https://www.mirror.co.uk/money/brighthouse-customers-set-lose-thousands-26977103 BrightHouse customers will lose thousands to mis-sold loans after collapse