Caversham Finance Limited, trading as BrightHouse, is the largest rent-to-own company in the United Kingdom, with over 270 stores. BrightHouse is a trading name of Caversham Finance Limited which is owned by private equity firm Vision Capital.
Caversham Finance Limited, previously a subsidiary of Thorn Group plc, was taken private in September 1998 in a deal arranged and financed by the Principal Finance Group of Nomura (now reconstructed as Terra Firma Capital Partners). The company was bought by Vision Capital in July 2007.
BrightHouse is a national retail chain that sells home electronic and domestic appliances, and household furniture and related products, on a ‘rent to own’ basis. It was founded in April 1994 as Crazy George, and rebranded as BrightHouse in 2002.
The company employed more than 3,000 staff as of 2012. and had 311 stores as of January 2017.
Brighthouse's revenue was £351.7 million for the year ending 31 March 2015, and its pre-tax profits were £19.6 million.
In 2017 Brighthouse submitted a reform plan to its regulator, the Financial Conduct Authority, following criticism of its lending practices, and announced plans to close 28 stores.
BrightHouse currently stocks brands which include Samsung, Sony, Philips, Acer, LG, Nintendo, Baird, Whirlpool, Beko, BlackBerry and Nokia. The company charges interest of between 69.9% and 99.9% APR, and also charges for delivery, installation and compulsory warranties. An investigation by the BBC's Victoria Derbyshire programme in 2016 cited an example of a washing machine costing £358, with a £55 delivery and installation charge and compulsory £136 warranty. The total cost of the appliance was £1,092 at Brighthouse's typical interest rate of 69.9%.
Some sources suggest Brighthouse makes it impossible to compare prices, though Chief executive Leo McKee said the retailer benefits through a "really obsessive" approach to customer service, with "aspirational products at very competitive prices", claiming that though an active comparison is not obvious, it actively compares with other retail competitors; The Co-operative, Amazon.com, Yhor and 24Ace.
Furniture accounts for about 20 per cent of sales, audio and visual for 30 per cent, domestic appliances for 20 per cent and technology for 30 per cent.
In 2008, BrightHouse won Best High Street Recycler at the National Recycling Awards. Moreover, the company won a Green Apple Award for Environmental Best Practice.
In October 2007, BrightHouse announced an exclusive agreement with Five to sponsor the Trisha Goddard show.
BrightHouse partnered the NSPCC in 2009. As well as running various fundraising events for the charity, BrightHouse has posters and promotional material in their stores to raise awareness.
In May 2009, an investigation by BBC Newsbeat suggested that BrightHouse mistreated customers who missed payments. A former employee told Newsbeat that the company tried to repossess goods without obtaining a court order, saying "We would just lie our way around it. Tell them we had the legal right to be there, and refuse to leave until they gave us the stuff." Commercial director Hamish Paton denied the company mistreated its customers, saying "We would only ever take the goods with the consent of the customer". Chris Tapp, director of charity Credit Action called for the Office of Fair Trading to investigate.
The company's lending practices have been criticised for targeting the "poorest, most desperate families" and operating in the "most deprived areas" of the UK. Other customers end up paying more than twice what they would have paid absent BrightHouse's finance charges. Their base prices have also been noted to be higher than those of upscale mainstream retailers such as Harrods.
In 2015 BrightHouse, along with its two largest competitors PerfectHome and Buy as You View, were criticised by the All Party Parliamentary Group on Debt and Personal Finance. According to Parliamentary group chair Yvonne Fovargue, "Rent-to-own stores like BrightHouse charge inflated prices to some of the poorest people in the country. Customers are often obliged to take out additional warranties and insurance, as a result paying several times the true value of the goods." BrightHouse chief executive Leo Mckee defended the company, saying that "We are proud to serve our customer base of lower income families. The service we provide gives them access to high-quality products for their homes at competitive prices."
In 2016 former Labour Party leader Ed Miliband joined a campaign against Brighthouse in his Doncaster constituency. Miliband accused the company of trying to "fleece" customers with expensive insurance and of harassing people who fall behind on their payments, and urged the public to use a local credit union instead.
An investigation for the BBC's Victoria Derbyshire programme in 2016 found that the company was selling to vulnerable people. The programme cited an example of a man with learning difficulties and mental illness who was paying Brighthouse for five separate items out of his benefit payments. It also featured an autistic man who purchased a PlayStation 4 from Brighthouse despite not understanding the contract, according to his mother who intervened on his behalf to get the contract cancelled.
In January 2015 Private Eye reported that BrightHouse had paid very little UK corporation tax between 2007 and 2014 - less than £6m - after revenues of £1.6bn and operating profits of £191m. According to Private Eye, interest of £76m owed to a Luxembourg-registered subsidiary of BrightHouse's owners Vision Capital had significantly reduced taxable profits. In addition, records showed BrightHouse's '5 star' insurance to be operated through a sister company based in Malta, where tax on profits would in effect be no more than 5 per cent under Maltese law. BrightHouse told Private Eye it complies with all relevant tax regulations and that all its arrangements were arranged with HMRC.