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£3.5 Million a year in BrightHouse penalty charges slip under the radar
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lefthooker_uk
Posts: 1 Newbie
Hi folks!
By now, thanks to the sterling work of sites like this one, the media and general public awareness, the issue of "unlawful" bank charges is now regularly discussed in pubs, bars and people's workplaces daily.
The message has finally been driven home, and the noose is tightening on the banks.
However, there is a company that earns around £3.5 MILLION a year simply by charging its customers, quite seemingly innocent, "late payment" charges on their agreements. This company is BRIGHTHOUSE. Regretfully, their actions seem to go somewhat "under the radar" and are rarely noticed or challenged because of the market sector they operate in.
The Consumer Action Group does have its own BrightHouse section in their Retail Forums HERE, but I would really like to try and raise awareness in other areas, too.
For anyone who doesn't know, BrightHouse is a high street retail chain specialising in the sale of electrical goods, home appliances, furniture and related products primarily on a rent-to-own (hire purchase) basis. They target the sub-prime market - in particular two socio-economic groups: cash constrained – those on low incomes; or, credit constrained – those who have been systematically refused access to credit.
Basically customers, who nobody else wants, can go to BrightHouse and enter into a "pay weekly" hire purchase agreements for items for their home. Naturally, there is a premium to pay. The APR is very high, and extra service cover and insurance policies usually mean the customer ends up paying around FOUR times the usual high street price.
BrightHouse fact sheet HERE (Warning - it's long...)
Anyway, what I really want to bring to your attention is the BrightHouse system of penalty charges for late payments imposed on their customers.
BrightHouse are very slick with marketing and PR. This is their "official" comment relating to "late payment" charges:
“…Unlike credit or store cards, although the customer is late paying, we do not invoke our right to charge any additional interest on the overdue amounts. We have a one off fee (currently £2.70) per agreement to re-instate the contract.”
A penalty charge of £2.70 (per agreement) for late payments may, on the surface, appear quite reasonable - that is until you consider it is a WEEKLY charge and is applied to all agreements individually. (Most customers will have more than one agreement. For instance, a typical bed will be spread over two separate agreements. One for the frame and one for the mattress.)
This equates to a monthly charge of more than £11.00 per agreement, and assuming an average customer may have 4 separate agreements, this quickly becomes a monthly penalty charge of around £50.00. (This makes the banks and their highly publicised penalty charges look like angels in comparison!)
BrightHouse claim to have in excess of 124,000 customers. They also admit that around 5% of these customers are, at any one time, in default or late paying. That means that around 6,200 customers are charged "late payment" fees to their agreement(s) every week.
Again, assuming an average customer has 4 separate agreements, "late payment" fees can easily provide BrightHouse with a steady weekly income of around £66,960. That's an INCREDIBLE £3,481,920 a year!
Punitive penalty charges are unlawful. Losses for breach of contract must only reflect the actual loss, and not be a way of profiteering. In much the same way as customers have challenged banks and had their bank charges refunded, people can also claim penalty charges back from BrightHouse. Regretfully, I only know of two actual cases where this has been done - but in both cases BrightHouse folded very quickly, and paid out in full before going to court!
Let's try and raise more awareness to this subject, and to other financial discrimination, in the sub-prime sector.
Cheers
Lefty
By now, thanks to the sterling work of sites like this one, the media and general public awareness, the issue of "unlawful" bank charges is now regularly discussed in pubs, bars and people's workplaces daily.
The message has finally been driven home, and the noose is tightening on the banks.
However, there is a company that earns around £3.5 MILLION a year simply by charging its customers, quite seemingly innocent, "late payment" charges on their agreements. This company is BRIGHTHOUSE. Regretfully, their actions seem to go somewhat "under the radar" and are rarely noticed or challenged because of the market sector they operate in.
The Consumer Action Group does have its own BrightHouse section in their Retail Forums HERE, but I would really like to try and raise awareness in other areas, too.
For anyone who doesn't know, BrightHouse is a high street retail chain specialising in the sale of electrical goods, home appliances, furniture and related products primarily on a rent-to-own (hire purchase) basis. They target the sub-prime market - in particular two socio-economic groups: cash constrained – those on low incomes; or, credit constrained – those who have been systematically refused access to credit.
Basically customers, who nobody else wants, can go to BrightHouse and enter into a "pay weekly" hire purchase agreements for items for their home. Naturally, there is a premium to pay. The APR is very high, and extra service cover and insurance policies usually mean the customer ends up paying around FOUR times the usual high street price.
BrightHouse fact sheet HERE (Warning - it's long...)

Anyway, what I really want to bring to your attention is the BrightHouse system of penalty charges for late payments imposed on their customers.
BrightHouse are very slick with marketing and PR. This is their "official" comment relating to "late payment" charges:
“…Unlike credit or store cards, although the customer is late paying, we do not invoke our right to charge any additional interest on the overdue amounts. We have a one off fee (currently £2.70) per agreement to re-instate the contract.”
A penalty charge of £2.70 (per agreement) for late payments may, on the surface, appear quite reasonable - that is until you consider it is a WEEKLY charge and is applied to all agreements individually. (Most customers will have more than one agreement. For instance, a typical bed will be spread over two separate agreements. One for the frame and one for the mattress.)
This equates to a monthly charge of more than £11.00 per agreement, and assuming an average customer may have 4 separate agreements, this quickly becomes a monthly penalty charge of around £50.00. (This makes the banks and their highly publicised penalty charges look like angels in comparison!)
BrightHouse claim to have in excess of 124,000 customers. They also admit that around 5% of these customers are, at any one time, in default or late paying. That means that around 6,200 customers are charged "late payment" fees to their agreement(s) every week.
Again, assuming an average customer has 4 separate agreements, "late payment" fees can easily provide BrightHouse with a steady weekly income of around £66,960. That's an INCREDIBLE £3,481,920 a year!
Punitive penalty charges are unlawful. Losses for breach of contract must only reflect the actual loss, and not be a way of profiteering. In much the same way as customers have challenged banks and had their bank charges refunded, people can also claim penalty charges back from BrightHouse. Regretfully, I only know of two actual cases where this has been done - but in both cases BrightHouse folded very quickly, and paid out in full before going to court!
Let's try and raise more awareness to this subject, and to other financial discrimination, in the sub-prime sector.
Cheers
Lefty
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