01 NOV 2017

BrightHouse interest rates should be capped

I used the story of a constituent to force the Financial Conduct Authority (FCA) to consider capping interest applied by rent-to-own companies like BrightHouse. Electricals retailer BrightHouse was last week fined £14.8 million by the FCA for irresponsible lending and treating customers unfairly.

In a Treasury Select Committee hearing yesterday, I grilled chief executive Andrew Bailey about what else FCA was doing to curb BrightHouse's "predatory" behaviour. I highlighted the case of a woman who paid more than £2,200 for a TV worth £600, and one of his own constituents who paid off 70% of the value of a product before having it taken away by a "very rude bloke" for one missed payment.

I asked Mr Bailey: "These people end up repaying three times, or more, what they should.

"And you yourself said in a speech that the cap on payday lending of two times maximum has been effective, and people haven't lost out.

"So why aren't you doing it with this sector?"

He responded: "That's what we are doing with high cost credit. We are looking at a number of sectors... Because I agree with you. The issue is real."

I continued: "Can I ask you to take away, as a message, there ought to be caps in this sector – just like payday lending. And will you take action?"

Mr Bailey responded: "Good point. That will be in the frame in terms of what we look at as a solution.

"Caps work better for some products than others but I want to be clear I'm not ruling it out."

I followed up by quoting the interest rates of a number of rent-to-own companies – BrightHouse (70%) PerfectHome (70%) and Buy As You View (69%), adding: "It's not a competition is it? It's a cartel."

We must do more to crack down on firms who prey on the poorest and most vulnerable in society. 


Post a comment

Back to all posts

Charlie Elphicke

Here you can read about local news matters and what I've been up to. You can make comments too. I'd welcome your feedback, so please do feel free to comment!