Britain’s largest rent-to-own company, BrightHouse has appointed insolvency practitioners from Grant Thornton after declaring £43.5 million pre tax losses and claims of ‘historic mis-selling’.
The firm – which is owned by Caversham Trading – will continue to provide insurance, servicing and warranties, although 2,400 jobs are at risk in their 240 UK stores.
The firm has reported it has increased its complaints provision from £4.9m to £17.5m which reflects the influx of complaints they have received over alleged mis-selling. These complaints currently cost the firm £1m per month, although this is set to rise considerably should cases with the Financial Ombudsman Services (FOS) be upheld.
It’s been a turbulent year for BrightHouse; In addition to the three CEOs it has lost in that time, new Financial Conduct Authority (FCA) regulations had prompted the company to undertake structural changes to the company which included a £220m deal which halved its external debt. Further changes to FCA legislation included a cap on credit card fees whereby charges could not exceed the cost of the product and a directive that required them to benchmark their costs against three other market providers. The final nail in the coffin was a cap on any price increases for insurance premiums, extended warranties or arrears charges, preventing the company for recouping lost revenue.
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