The Financial Conduct Authority is weighing up an investigation into the business practices of rent-to-own retailers such as BrightHouse.
The City watchdog’s director of consumer lending Linda Woodall claims correspondence with BrightHouse, PerfectHome and Buy As You View has unearthed “concerning statistics” and set off “alarm bells”, according to The Sunday Times.
Woodall said half of all customers that bought products on rent-to-own contracts, failed to pay in full and 22% were forced to either surrender the product or have them repossessed.
Her comments emerged in an all-party parliamentary group on debt and personal finance in December and the committee is set to publish its report on Tuesday.
The inquiry into the scrutinising of rent-to-own retailers’ business practices was set in motion in September, shortly after it emerged BrightHouse owner Vision Capital was laying the ground work for an IPO.
Vision Capital hired Rothschild to explore its options, including a possible IPO that could value it at between £550m and £750m.
At the time the inquiry was announced, a BrightHouse spokesman said: “Our customers choose to shop at BrightHouse because they value our range of top quality products for the home, our affordable weekly payments and the personal service we offer in nearly 300 communities across the UK.”