Credit, Collections & Insolvency News
Rent-to-own firm BrightHouse has entered administration. Chris Laverty, Trevor O’Sullivan and Helen Dale of Grant Thornton have been appointed as Joint Administrators.
BrightHouse is the trading name of Caversham Finance. The company provided rent-to-own and cash lending services to the consumer market. The company also included Caversham Trading Ltd (CTL) operates a logistics and engineering business supporting servicing, warranty and insurance claims of BrightHouse rent-to-own customers.
The Joint Administrators are now in full control of these businesses’ operations and will continue to trade the businesses in line with Government guidance as to remote working or, where essential services are being carried out, only in circumstances where we can provide for employee and customer safety.
The company has over 200,000 rent-to-own customers who make monthly payments for household appliances, in effect renting goods (and paying interest) until they have paid in full.
The Joint Administrators will explore options to increase the value for creditors including an orderly wind down of the businesses’ over time and sale of the assets. The Joint Administrators will start the process of identifying all creditors, in accordance with their statutory obligations, and provide those creditors with information as to the potential for recoveries in the administration estate.
BrightHouse has 200,000 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.
The collapse will see 240 shops close unless a buyer is found. The company is thought to have 2,400 employees
In January, the business said it was under pressure from dealing with mis-selling claims.
Adam French, Which? Consumer Rights Expert, said “Few former customers will mourn the loss of BrightHouse which has been embroiled in a mis-selling scandal since 2017, however its imminent collapse will be concerning for employees and those still waiting to resolve claims against the firm.”
“If the retailer goes bust, an administrator is likely to oversee the scores of mis-selling claims lodged against the firm. However, claimants may have to wait longer for their compensation and receive a smaller sum.”
“Current customers with outstanding debt will be expected to keep making repayments to the administrator in the event of a collapse. While those with a warranty policy may still be able to make a claim if their product is faulty.”