Cambrian Credit Union Reacts To Brighthouse Closure
With the UK’s biggest rent-to-own operator – Brighthouse – in administration, the General Manager of Cambrian Credit Union Ann Francis is warning people – now more than ever – to safeguard themselves from falling victim to unmanageable debt.
For years, Cambrian has campaigned against the rent-to-own company Brighthouse, its business model saw people paying weekly instalments on goods, with interest repayments costing them several times the initial cost.
In October 2018, we joined Ann Jones AM and Chris Ruane MP in a protest outside the Rhyl branch of Brighthouse to highlight how much better off its customers could be with a credit union.
You can imagine, we are not mourning the end of Brighthouse, the company thrived at the expense of its customers, shown by the raft of mis-selling compensation claims from its customers and the nearly £15m fine it received from the Financial Conduct Authority (FCA) in October 2017. However, the loss of any jobs, especially at the current time, is not something to celebrate.
Brighthouse is the latest in a line of high cost credit providers to collapse, hot on the heels of Wonga, QuickQuid and The Money Shop. There are concerns that this will lead to an increase in people turning to loan sharks. In current times, with so many facing sudden financial hardship, this is a significant risk.
There is an alternative, as community-based saving and loans providers, with no external shareholders, credit unions are able to offer loans at reasonable rates from as little as £50 to £15,000. Interest on loans is charged on the reducing balance and there are no early repayment fees. We usually are able to offer life insurance on the loan at no extra charge.
Unfortunately, the closure of Brighthouse doesn’t mean its 200,000 existing customers don’t have to make repayments; failure to pay will mean forfeiting goods.
It also means that those with outstanding mis-selling, compensation claims against Brighthouse are likely only get a fraction of the sums they had hoped to receive.
If you need credit, please 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.