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BrightHouse Collapses: Why was this predatory lender allowed to operate for 25 years?

On March 20, 2020, rent-to-own company BrightHouse entered administration. The company has been struggling for the last couple of years, since the FCA ordered it to reimburse or compensate thousands of customers a total of £15m ($18m) for missed deposit refunds and proceeding with loans to people for whom it was unaffordable. The recent nationwide lockdown was the final nail in BrightHouse’s coffin, putting an end to a 25 year legacy of predatory lending and obscene interest rates.
The company struggled in recent years to repair a terrible public image as effectively a loan shark. There is much evidence to support BrightHouse’s public perception as an irresponsible, immoral lender, targeting the poorest and most vulnerable in the UK’s society. The company charges between 70% and 100% APR interest and has resulted in many customers paying three or four times the value of the product over the course of their contract with the company.

While one can make the argument that the UK is a free market economy, and BrightHouse is simply offering a service to customers who choose to enter into agreements, there is enough evidence to say with confidence that BrightHouse went beyond responsible behavior to take advantage of the natural human desire to want what one cannot afford. Combined with anecdotal evidence of threatening behavior by the company when payments were missed, and the fact that over 80,000 customers were lent to without proper affordability assessments over only two and a half of their 25 years of operations, it is clear to see that BrightHouse was targeting the most vulnerable. The company was either choosing to skip over the proper checks, or disregarded the knowledge that people were unlikely to be able to meet repayments, all in the pursuit of profit.

While the collapse of BrightHouse is a welcome one on the UK high street, the sector has very few players and risks becoming a monopolistic market, in which customers will have even less power than when BrightHouse was operating. The sector needs better regulation and more ethical management to avoid large-scale corporate profiteering off the backs of the poorest and most vulnerable in society.