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Citizens Advice responds to BrightHouse compensating customers for not carrying out proper affordability checks

24 October 2017

Citizens Advice has today welcomed the news that BrightHouse has committed to reimburse £14.8 million to customers for offering rent-to-own deals on household goods without the proper affordability checks.

Previous research by the charity has found that one in five rent-to-own customers spent 20% or more of their income on payments, and more than half had to take on other debts to cover the costs.

Citizens Advice has called for the FCA to improve affordability checks for rent-to-own customers to prevent people from being offered agreements they can’t afford.

In addition to action to help people when they are in debt, the charity is asking for more protection for people against unaffordable lending. The charity is also asking the payday loan cap to be extended to all forms of high cost credit - meaning that no one would pay more than twice what they borrowed in interest and charges.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Citizens Advice has long called for the Financial Conduct Authority to take action on poor affordability checks on rent-to-own deals, which can trap people in debt.

“In the last 12 months, Citizens Advice helped people with more than 13,000 rent-to-own issues where people were struggling to make repayments for essential goods like fridges and washing machines.

“We’re pleased to see that the FCA are taking action against BrightHouse whose loose lending practices have pushed the very people who can least afford it further into financial difficulty.

“Citizens Advice is calling on the FCA to tighten up credit checks across the rent-to-own sector to prevent people getting caught in a debt spiral.”

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Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.