This is a guest post by Sara Williams, an adviser at Citizens Advice who has her own website Debt Camel where she blogs about everything to do with debt and credit ratings. She also guest posted Everything you need to know about Payday loans The only person so far who has written two guest posts on my blog ‘cos she’s sooo good at her stuff!
BrightHouse is a “pay weekly” chain of shops which is loathed by almost all debt advisers.
What’s so wrong with BrightHouse?
Their interest rates are high, but that isn’t the only reason. BrightHouse goods are often much more expensive than a similar TV or washing machine would be from another retailer. In addition they make most people add on expensive insurance.
The result is that you could spend more than £750 paid over three years on a Hoover washing machine, when you could get a very similar model from AO.com at £230.
So far so bad… but these rip off prices are made worse by the fact that BrightHouse has often failed to check properly that its customers can afford the items they are buying. The quoted weekly amounts may sound manageable but most BrightHouse customers are on low income or just benefits.
And BrightHouse goods are sold on Hire Purchase agreements. So customers in the last year of their contract who have financial problems will often be desperate to make the last few BrightHouse payments, rather than lose the item they have already paid so much for. They may get behind with rent, council tax and utility bills or take out expensive credit such as payday loans as a result.BrightHouse refunds
In October the Financial Conduct Authority (FCA), BrightHouse’s regulator, told them to refund a bit under £15 million to two groups of customers:
- People who had cancelled a purchase within the 14 day cooling off period but still made 1 payment. These refunds will be small as it’s only 1 week’s payment to be refunded.
- 81,000 people who bought something between 1 April 2014 and 30 September 2016 where BrightHouse think they should have done more affordability checks – average refund £125.
If you want to know if you will be getting a refund, call their free helpline: 0800 30 40 80. £15 million sounds good, but in practice not many people are getting them considering the amount of stress and misery BrightHouse has caused.
The FCA took over as BrightHouse’s regulator in 2014, but before then the regulator was the Office of Fair Trading (OFT) and the OFT had the same rules about checking affordability as the FCA has. So I think people with older purchases should also get refunds. And if you had a purchase after 2014 which they aren’t refunding, you can make a complaint that it was unaffordable.
See How to make an affordability complaint to BrightHouse for a template letter and more information about complaining to Brighthouse.
If your purchase was “unaffordable” then you should get a refund of all the interest you paid, plus 8% simple interest and have any negative marks on your credit record deleted.
Other BrightHouse complaints
BrightHouse also have a poor reputation for customer service when something goes wrong – an item doesn’t match its description, or it is faulty.
If you have one of these “consumer complaints”, you have the same legal rights under the Consumer Rights Act 2015 as if you bought the goods from a normal shop. See the article on this website that looks at these rights and how to complain – it’s got some useful videos.
Alternatives to BrightHouse
Many people with little money go to BrightHouse because they are desperate. But here are some better alternatives, so check if one might work for you:
- Local Welfare Assistance Scheme (used to be called Crisis Loans). These are harder to get now than they used to be, but it’s worth asking your council if they help families to replace things like white goods and essential furniture.
- Budgeting loans If you have been on JSA, ESA, Income Support or Universal Credit for more than 6 months, you may be able to get an interest-free budgeting loan.
- Credit Union You may be able to join a local one or one linked with your job, eg NHS staff.
- Fair For You – this is an online alternative to BrightHouse, offering weekly payments but without the markup on the original prices and their interest rates are lower. Check them out!