FCA announces redress scheme for rent-to-own firm PerfectHome

Written by Adam Cadle

PerfectHome has agreed with the FCA a package of redress totalling over £2.1m.

This will be made up of cash payments and balance write-offs for 37,000 customers.

PerfectHome (a trading name of Temple Finance Limited) is a rent-to-own firm which provides household goods to customers on hire purchase agreements.

Responsibility for regulating the rent-to-own sector transferred from the Office of Fair Trading to the FCA in April 2014. Following this the FCA identified that the firm’s affordability assessments did not adequately take into account customer circumstances which led to customers being issued with loans they could not afford.

In addition collections processes did not always deliver good outcomes for customers with some customers being charged late fees for arrears on their insurance contracts, contrary to the firm’s own policy, customers paying for insurance before receiving goods and customers not always receiving a refund of their first payment where the agreement was cancelled before goods were delivered.

In response to these concerns PerfectHome has conducted a major programme of improvements to ensure that loans are affordable and customers are treated fairly throughout the collections process.

PerfectHome has identified customers that may have been treated unfairly in the past and has committed to pay redress to these customers.

The scheme proposes redress for customers in four sets of circumstances. A total of £1.7m relates to 4,000 customers where it was found that affordability assessments were not completed satisfactorily. This meant, in some cases, customer circumstances were not sufficiently considered and loans were issued that may not have been affordable for customers.

The remaining redress relates to: incorrectly charged late fees; insurance payments made prior to the delivery of goods; and initial payments made against sales that were subsequently cancelled.

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