BrightHouse which targets low income families with the offer of new home furnishings and white goods on a high interest ‘rent to buy’ basis has warned that it is close to collapse. The business which has been swamped with customer compensation claims over miss-selling issues and has also received a deal of negative media coverage last restructured in 2017.
“The level of redress claims from customers is putting increasing pressure on the available liquidity in the group,” stated the company which has incurred growing losses. The jobs of staff in its 240 stores and head office are at risk.
Market watchers say that the selling proposition at BrightHouse has historically attracted customers in receipt of benefits and often with bad credit history who are lured into ‘renting’ new furniture which they clearly cannot afford. The irony is that there is an abundance of perfectly good second user furniture available at very low cost from charities the length and breadth of the UK which BrightHouse customers could have bought instead, were they prepared to wait a few weeks until they could afford it.
The recent spate of miss-selling claims has been spurred by social media, just as in the case of a number of high interest payday lenders. Some suggest that the next targets of the consumer action groups behind these campaigns could well be the flurry of lenders offering to slice payments for customers of retailers and online merchants which tends to encourage customers to spend considerably more than they can realistically afford to.
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