Administration for Brighthouse
Rent to buy furniture and electricals chain Brighthouse has gone into administration.
Grant Thornton has been named as administrator of the 240 store chain, which employs 2,400 staff.
In October 2017, the company was fined almost £15m by the Financial Conduct Authority for not acting as a ‘responsible lender’. It said some customers were given rental agreements, despite being unable to realistically afford to make the repayments. In January, the chain said it was under pressure from dealing with additional mis-selling claims.
The chain saw profits crash after the FCA imposed more detailed consumer application requirements as part of a wider investigation of the sector. This saw a major drop in new customers.
Historically the company has been criticised for its high interest rates and late payment penalties. For example, a Fortana leather sofa (pictured) costing £863.51, including £60 delivery, had cost £1,107.08 if paid over a year. Over three years the cost rose to £1,716, with an APR of 69.9%. In addition customers had to have had accidental damage, fire and theft insurance. If bought from Brighthouse this costs £1.34 a week. An optional care package costs £2.05 a week. If both were signed up for, the Fortana over three years would eventually cost £2,244.84.