BrightHouse (retailer)

Caversham Finance Limited, trading as BrightHouse, was the largest rent-to-own company in the United Kingdom, with 270 stores.[3] It was a national chain that provided home electronics, domestic appliances, household furniture, other related products on a hire purchase agreements. Cash loans were offered towards the end of the company's existence.

Caversham Finance Limited was owned by private equity firm Apollo Management.[4]

In October 2017, the company was ordered by the financial regulator, the Financial Conduct Authority, to pay 249,000 customers £14.8m due to the firm not compensating customers who had cancelled agreements after one down payment and to those who signed up to "unaffordable" lending agreements. The FCA said the retailer had not been a "responsible lender" and had treated customers unfairly.[5][6][7]

Criticism

Business practices

In May 2009, an investigation by BBC Newsbeat suggested that BrightHouse mistreated customers who missed payments. A former employee told Newsbeat that the company tried to repossess goods without obtaining a court order, saying "We would just lie our way around it. Tell them we had the legal right to be there, and refuse to leave until they gave us the stuff." Commercial director Hamish Paton denied the company mistreated its customers, saying "We would only ever take the goods with the consent of the customer". Chris Tapp, director of charity Credit Action called for the Office of Fair Trading to investigate.[30]

The company's lending practices have been criticised for targeting the "poorest, most desperate families" and operating in the "most deprived areas" of the UK. Other customers end up paying more than twice what they would have paid without BrightHouse's finance charges.[31]

In 2015, BrightHouse, along with its two largest competitors PerfectHome and Buy as You View, were criticised by the All Party Parliamentary Group on Debt and Personal Finance. According to Parliamentary group chair Yvonne Fovargue, "Rent-to-own stores like BrightHouse charge inflated prices to some of the poorest people in the country. Customers are often obliged to take out additional warranties and insurance, as a result paying several times the true value of the goods." BrightHouse chief executive Leo Mckee defended the company, saying that "We are proud to serve our customer base of lower income families. The service we provide gives them access to high-quality products for their homes at competitive prices."[32]

In 2016, former Labour Party leader Ed Miliband joined a campaign against BrightHouse in his Doncaster constituency, begun by South Yorkshire Credit Union and its CEO Murdo Macleod. Miliband accused the company of trying to "fleece" customers with expensive insurance and of harassing people who fall behind on their payments, and urged the public to use a local credit union instead.[33][34]

An investigation for the BBC's Victoria Derbyshire programme in 2016 found that the company was selling to vulnerable people. The programme cited an example of a man with learning difficulties and mental illness who was paying BrightHouse for five separate items out of his benefit payments. It also featured an autistic man who purchased a PlayStation 4 from BrightHouse despite not understanding the contract, according to his mother who intervened on his behalf to get the contract cancelled.[20]

Tax avoidance

In January 2015, Private Eye reported that BrightHouse had paid very little UK corporation tax between 2007 and 2014 – less than £6m – after revenues of £1.6bn and operating profits of £191m. According to Private Eye, interest of £76m owed to a Luxembourg-registered subsidiary of BrightHouse's then owners Vision Capital had significantly reduced taxable profits. In addition, records showed BrightHouse's '5 star' insurance to be operated through a sister company based in Malta, where tax on profits would in effect be no more than 5 per cent under Maltese law. BrightHouse told Private Eye it complies with all relevant tax regulations and that all its arrangements were agreed with HMRC.[35]

In 2017, The Guardian disclosed details from the Paradise Papers that Queen Elizabeth II had invested some money in the company over a 12-year period via the Duchy of Lancaster.[36]

type	Subsidiary
fate	Administration
foundation	April 1994
defunct	March 30, 2020
location city	Watford
location country	United Kingdom
locations	270 stores
area served	United Kingdom
key people	Alan Gullan (interim CEO)‡R1R‡
industry	Retailer
products	Furniture Consumer electronics Household appliances
num employees	2,400 (February 2020)‡R2R‡
parent	Apollo Global Management
homepage	www.brighthouse.co.uk

BrightHouse (retailer)

History

Product offerings

Awards

Charity and partnerships

Criticism

Business practices

Tax avoidance

External links

References