Brighthouse, the UK’s largest rent-to-own retailer which has been heavily criticised by MPs for charging “inflated prices” to vulnerable customers, has said the Financial Conduct Authority is likely to give it a full consumer credit licence after it demonstrated it is “financially sustainable” and treats customers “fairly”.
The FCA took over regulation of the consumer credit sector in 2014, and Brighthouse has since been operating under interim permission from the watchdog. The drawn-out application process had damped hopes that the company, which is currently owned by private equity firm Vision Capital, could launch an IPO.
Last November the FCA announced it would consider tighter controls on high-cost products, including rent-to-own retailers and payday loan groups.
However, in a statement today, Brighthouse said it has been notified that the FCA is “minded to authorise our business”, subject to it continuing to meet conditions over the next year, mainly related to the refinancing of a corporate bond.
The company said it is restructuring its existing debt to illustrate its financial sustainability, and had shown that its business plan is “suitable for a firm that is complying with the threshold conditions and treating customers fairly. Brighthouse said its business plan does not incentivise employees to act against the interest of its customers.
Brighthouse has been singled out for criticism by MPs in the past for the high interest rates it charges customers. A report produced last year by the Financial Inclusion Centre think-tank found that the cheapest washing machine sold by Brighthouse, which on the high street would cost £349.97 with delivery, disposal and a breakdown plan included, would cost a total of £1,056 from Brighthouse.
We have worked to address [the FCA's] concerns and we are pleased that …Brighthouse meets the standard for authorisation. We look forward to continue serving our customers across the UK.