Rent-to-own retailer BrightHouse on brink after surge of mis-selling claims
- Accountancy firm Grant Thornton is on standby to handle a potential insolvency
- The collapse of BrightHouse would put 2,400 jobs at risk
- The firm offers rent-to-own deals on electrical goods to hard-up shoppers
High-interest loans firm BrightHouse faces going bust after being hit by a surge of mis-selling claims.
Accountancy firm Grant Thornton is on standby to handle a potential insolvency, which looks increasingly likely, Sky News reported.
The collapse of BrightHouse, which offers so-called rent-to-own deals on electrical goods to hard-up shoppers, would put 2,400 jobs at risk. It has 240 stores across the UK.
On the brink: BrightHouse offers rent-to-own deals on electrical goods to hard-up shoppers
Its customers typically struggle to get credit from banks. Their payments are spread over one or two years at a typical 69.9 per cent interest rate, meaning a £235.50 washing machine would cost £301.60 in repayments.
It was ordered by the Financial Conduct Authority in 2017 to pay £14.8million to 249,000 customers after persuading them to take out unaffordable debts.
BrightHouse claims it lends responsibly but admitted the volume of mis-selling claims is putting ‘increasing pressure’ on the firm. It is in talks with its investors about options to rescue the business.
A BrightHouse spokesman said: ‘The protection of value in the business and safeguarding of customers’ interests are core to our planning.’
Grant Thornton declined to comment.