Rent-to-own firm PerfectHome has been ordered to refund a total of £2.1m to customers issued with loans they could not afford, in an agreement with the Financial Conduct Authority (FCA).
The FCA identified that the firm’s affordability assessments did not adequately take into account customer circumstances. Additionally, the regulator said collections processes did not always deliver good outcomes for customers, with some shoppers being charged late fees for arrears on their insurance contracts, contrary to the firm’s own policy.
PerfectHome has identified customers that may have been treated unfairly in the past and has said it will refund them accordingly.
Jonathan Davidson, executive director of supervision retail and authorisations at the FCA, said: “Our key priority is to ensure all financial firms lend responsibly and treat consumers fairly; especially those in financial difficulties or who are vulnerable. Unaffordable lending is not acceptable in any circumstances. I am pleased that the firm has taken steps to address this and provide redress to those customers affected.”
He added: “PerfectHome will contact all affected customers to explain the refund or balance adjustment they will receive. Around 2,425 customers whose loans were unaffordable, which led to them defaulting, will have their debts written off by the firm. They will also become the owners of the goods they originally got the loan for.”
PerfectHome CEO, Mike Sweetland, said: “We wish to say sorry to our customers and we’re putting that right. Those affected will be receiving letters from me personally with information about their redress payments which will be made by cheque or balance adjustments.”