RENT-TO-OWN firm BrightHouse would be to shell out lb14.8MILLION in compensation to customers following the financial watchdog found that it had treated customers unfairly.
Some customers may have the loans wiped off, while some is going to be handed back cash due to the investigation.
In total the rent-to-own firm, that takes weekly payments from customers, are obligated to repay 249,000 customers.
Customers won't need to take any action as BrightHouse will contact all those affected and notify them if they're due a refund.
City watchdog, the Financial Conduct Authority (FCA), said BrightHouse had not been a "responsible lender" and had failed to meet its expectations.
Brighthouse has proposed redress for two teams of customers:
- Those whose circumstances weren't assessed properly when the loan was taken out to make sure they could afford it. Customers who handed back the products is going to be paid back the eye and costs charged plus interest of 8 percent. Customers who kept the products will have their balances wiped off.
- Customers who made the first payment under their agreement which was then cancelled before the goods were delivered. This primary payment wasn't returned to all customers and Brighthouse will refund this payment plus interest of 8 per cent.
The compensation bill for the first group of customers is set to be a lot more than lb10million affecting 81,000 customers, as the bill for the second is set to be around lb4.7million, affecting 181,000 customers.
Brighthouse charges customers around 70 per cent for buying furniture, electricals along with other home items on the payment periods spanning up to three years.
Jonathan Davidson, director of supervision at the FCA, said: "I'm pleased that BrightHouse has agreed to provide redress to people customers impacted by these historic practices.
“This scheme continues our use the rent-to-own sector to solve the concerns we have previously identified.