Rent-to-own giant BrightHouse is close to collapse, the BBC understands, putting 2, jobs at risk.
The company is expected to fall into administration on Monday after facing an influx of compensation claims for selling to people who could not repay .
Stricter lending rules had put the business under strain long before shops were closed owing to coronavirus. (
BrightHouse has 200, 2019 customers and Is the largest operator in the rent-to-own sector.
Rent-to-own customers make monthly payments for household items, in effect renting goods until they have paid in full. Many are on low incomes and find it difficult to access credit from mainstream lenders to pay for fridges, TVs, washing machines and other electrical items.
What should customers do?
BrightHouse customers, about a third of whom are in work, will continue with payments , even if the company goes into administration.
Debt adviser Sara Williams, who writes the
Debt Camel blog , said: “Now the company is expected to go into administration, customers need to think if they can manage to make the repayments.
“If their income has fallen because of coronavirus, they should ask for a payment break. And if the item is just too expensive, they should ask for a lower payment arrangement. They may be able to make an affordability complaint and get a refund of the interest they have paid on previous items. “
The expected collapse, (first reported by Sky News ), would see shops close unless a buyer is found.
In January, the business said it was under pressure from dealing with mis-selling claims.
Alongside many other lenders of high -cost credit, the company was being challenged by people who said they were given credit when they would never have been able to afford the repayments.
This came after rules, introduced last year, which restricted the cost of rent-to-own , following claims of spiralling debts.
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