CREDIT UNIONS OF WALES STATEMENT AS BRIGHTHOUSE GOES INTO ADMINISTRATION
With the UK’s biggest rent-to-own operator – Brighthouse – in administration, Credit Unions of Wales is calling on people to turn to responsible loan providers.
Brighthouse faced a raft of mis-selling compensation claims from its customers and in October 2017, it was fined nearly £15m by the Financial Conduct Authority (FCA), for not acting as a ‘responsible lender’. Tighter FCA regulations and the recent forced closure, due to Covid-19 restrictions, of its 240 UK stores proved too much for the company.
Claire Savage, Policy Officer of Credit Unions of Wales said: “Credit unions across Wales campaigned to see an end to Brighthouse. Its closure, at this crucial time for the nation’s finances, could protect more people from falling into unmanageable debt.
“However, the company’s 200,000 current customers will be expected to continue to make repayments as before. It also means that those with outstanding compensation claims are likely only get a fraction of the sums they are seeking and 2,400 people will lose their jobs.
“To ensure you get a fair and affordable deal Credit Unions of Wales urge people to check not just the amount repayable every week but also the interest rate, the cost of the credit and the total amount that will be repaid before agreeing to any deal.
“We also encourage people to check out their local credit union, many of which have loan repayment calculators on their websites, to see if we can offer a better deal.”
The closure of Brighthouse will see 2,400 staff lose their jobs and follows the demise of other high-cost credit providers such as Quickquid, Wonga and The Money Shop.
Credit Unions of Wales is an association of the country’s 17 credit unions, who work together to improve levels of savings and access to affordable credit for all members of the community.
As ethical saving and loans providers, with no external shareholders, credit unions are able to offer loans at reasonable rates from as little as £50-£15,000.
Interest on loans is charged on the reducing balance and come with no hidden charges and no penalties for repaying the amount early.