Brighthouse Fact Sheet
Contents
Brighthouse Stores (formerly Crazy Georges) Fact Sheet
By Lefty (November 2007)
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Brighthouse is a high street electrical/furniture store and offers hire-purchase credit facilities to anyone – regardless of income, status and credit history. They target, in particular, the “sub-prime” - unemployed, single parents, council tenants and those with previous credit problems. Their stores are usually to be found in deprived areas – places the big banks and building societies have long abandoned.
Taking their place alongside Provident (doorstep loans) and Cash Converters (the buyback store), Brighthouse join the top three UK companies that specialise in exploiting the poor and profiteering from poverty.
Brighthouse have, for many years, been the target of several debt and consumer action groups, this due to their predatory lending and very well publicised disregard for consumer law. Add to that their highly questionable contracts, sales techniques, non-negotiable extra insurance policies and “bully-boy” tactics when customers get into difficulties, you’ll soon see why! But like any bully, if you stand up to them THEY WILL BACK DOWN!
Some years ago I got myself into financial difficulty and, as a result, my ability to obtain credit became seriously impaired. Therefore, I had little or no choice than to use stores like Brighthouse for larger purchases. Although I am relatively happy to accept that I am now considered as part of the “sub-prime” market (and have to pay more for credit), this does NOT mean that statutory consumer law does not apply to me!
So, if you do need to use Brighthouse, here’s some advice and a few tips on how to deal with them…
1 – HIRE PURCHASE AGREEMENTS
When you enter into an agreement with Brighthouse, you are entering into a HIRE PURCHASE or CONDITIONAL SALE agreement. Hire purchase agreements are governed by THE CONSUMER CREDIT ACT 1974 and, more specifically, the SUPPLY OF GOODS (IMPLIED TERMS) ACT 1973 (see below). Ownership of the goods remains with Brighthouse until the last payment is made.
However, this does NOT mean that Brighthouse can just stroll into your home and remove their goods if you get into difficulties. First they must issue you with a default notice. This notice must be in writing and NOT just a threatening phone call. THEY CANNOT FORCIBLY ENTER YOUR HOME! They can, however, re-posses their goods if they are in a public place.
If you have paid more than one third of your agreement total, Brighthouse must seek a court order before they can re-posses their goods. (Note - if, after one third of the agreement total has been paid and Brighthouse re-posses their goods without a court order and against your will, then Brighthouse are in breach of their agreement and you can claim back all payments made previously on it.)
To enter your home and re-posses their goods they must have a court order (even then they cannot forcibly enter your home) – and in order for them to obtain one you would have the right to put your case forward in court and, most likely, be granted time to pay. If you have paid more than half of the instalments on your agreement, any court would be inclined to allow this and force Brighthouse to comply.
Basically, you should ignore and disregard anything Brighthouse say to you UNLESS IT IS IN WRITING!
2 – “OPTIONAL” SERVICE COVER
Brighthouse “Optional” Service Cover agreements are underwritten by Brighthouse parent company, Caversham Finance, and are added to your hire purchase agreement as an additional weekly payment.
You should cancel any “Optional” Service Cover policies you have now! Because:
a) the service cover was most likely applied automatically without giving you the option to choose whether you required it or not, and
b) the service cover is extremely over-priced and represents very poor value for money when compared to a typical manufacturer’s own extended warranty as the following examples show.
Hewlett Packard Extended Warranty - Available upon registering a new Hewlett Packard product or at the end of the manufacturer’s 12 month guarantee period
A single one off payment of £88.99 which provides an additional 2 years of cover to the initial 12 months guarantee period, giving a total of 3 years cover. This cover includes collection and return, all parts and labour and a brand new replacement product if any repair is not completed within 28 days
Caversham Finance (Trading as Brighthouse) “optional” service cover
104 weekly payments of £5.77 (total £600.0 providing service cover for the 2-year duration of the agreement. (As Hewlett Packard guarantees all new products for the first twelve months regardless, this figure only represents one year of actual extended service cover. The cost of this cover is extortionate and, quite simply, cannot be justified.
Of course, “Optional” Service Cover isn’t really service cover at all. As we’ve already established, all new products are subject to a 12 months manufacturer’s warranty, (which, of course, is in addition to your statutory rights – more about that later…) and any volume purchaser like Brighthouse will be able to negotiate massive discounts with outside service agents for any repairs that may occur at other times. No. “Optional” Service Cover is really a thinly disguised payment protection plan that protects the interests of Brighthouse and NOT you!
Brighthouse also appear somewhat confused over the word “optional.” My interpretation (having studied their terms and conditions) is that service cover is an “option” to purchase at the time of the initial agreement and cancellation thereafter will require 7 days notice. However, Brighthouse will say “optional” means the option not to purchase the service cover can only be exercised at the time of the initial agreement and, furthermore, cannot be removed thereafter!
This is a complete lie. Service cover is optional and can be removed. Of course, an attempt remove it will invoke fierce resistance from Brighthouse! Store managers have been briefed by their area managers regarding this “growing problem” as more and more customers are getting wise and seeing through the con that this service cover is! You can thank forums like this one for that!
To remove optional service cover from your agreement(s), put a request in writing to your store (and to head office). Once this has been done the store has to comply with your request. Quote your terms and conditions:
“Your Obligations: Optional Service Cover Section C (b) The service cover premium is renewable each time your regular instalment is due under the agreement. If the premium is not paid Service Cover will lapse.
Section H (3) This policy shall continue in force until you give seven days notice…”
You may also like to quote this extract from a transcript of the BBC 4 programme, “Money Box.”
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3 - DAMAGE LIABILITY INSURANCE
Brighthouse “Damage Liability Insurance” agreements are, once again, underwritten by Brighthouse parent company, Caversham Finance, and are added to your hire purchase agreement as yet another additional weekly payment.
This insurance policy (around £250 on a £800 cash price product) is loaded AUTOMATICALLY and will only be removed if you can supply proof of "suitable" home contents insurance. (Brighthouse reserve the right to determine what is and what is not "suitable". In fact, very few home contents policies will specifically include items subject to a hire purchase agreement.)
You are told this insurance covers the product for damage, theft, fire, flood etc. However, unlike "real" home contents insurance it WILL NOT provide you with a replacement product should it become necessary (not even like-for-like) and will only, at best, release you from your agreement with Brighthouse - who, ultimately, benefit from the policy. You end up with NOTHING!!! Furthermore, in the event of a claim, the store manager will have the final say as to whether the policy should apply. He may, for instance, decide the goods where stolen or damaged because you didn’t secure or look after them adequately.
Basically, “Optional Service Cover” (above) and “Damage Liability Cover” is just one big payment protection policy split into two and sold (forced) onto the customer at an EXTORTIONATE cost.
The two insurance policies combined – and based upon a typical £800 cash price product – would eventually cost an extra £850.00
4 – LATE PAYMENT CHARGES
Brighthouse impose a penalty charge of £2.70 (per agreement) for late payments – even if only by one day! This may, on the surface, appear quite reasonable until you consider this is a WEEKLY charge and is applied to all agreements individually. (Most customers will have more than one agreement. For instance, a typical bed will be spread over two separate agreements. One for the frame and one for the mattress.)
This equates to a monthly charge of more than £11.00 per agreement, and assuming an average customer may have 4 separate agreements, this quickly becomes a monthly penalty charge of around £50.00. (This makes the banks and their highly publicised penalty charges look like angels in comparison!)
Punitive penalty charges are illegal in common law. Losses for breach of contract must only reflect the actual loss, and not be a way of profiteering. In much the same way as customers have challenged banks and had their bank charges refunded, people have also succeeded with claiming penalty charges back from Brighthouse.
5 – YOUR STATUTORY RIGHTS AND THE SUPPLY OF GOODS (IMPLIED TERMS) ACT 1973
If you have successfully removed the service cover from your agreement, and the goods then develop a fault, don’t be fobbed off with any rubbish that repairs have to be paid for and the responsibility lies with you. Regardless of how old your product is, and assuming it's been used correctly and in accordance with the manufacturer’s instructions, then Brighthouse have a LEGAL duty to comply with the SUPPLY OF GOOD (IMPLIED TERMS) ACT 1973 and either refund, replace or repair (dependant upon how old the goods are) as necessary.
Contrary to popular belief, your basic consumer rights DO NOT expire after 12 months! A new product should be of "satisfactory" quality, "fit for the purpose", "free from defects", "safe" and "DURABLE." The act relies on how a "reasonable" person would define "satisfactory" - and (in the case of a freezer, cooker or high end electrical product) a "reasonable" person would NOT expect a product to only last 12 months. High-end electrical products and most domestic appliances should have a useable life expectancy of anything between 4 - 18 years!!!!!
Your rights under the SUPPLY OF GOODS (IMPLIED TERMS) ACT 1973 can last for up to six years!
6 – YELLOW MONEY
Brighthouse have a system they call “yellow money”. How it works is like this: When you make a payment you are encouraged to round up and leave any excess (your change) in your account. This amount is then added to “yellow money” – a separate account in your name. These amounts can soon add up. Brighthouse DO NOT pay you any interest on this money – however, you CAN withdraw it at any time!
This is possibly illegal, and certainly not governed by the FSA.
Brighthouse claim to have in excess of 100,000 customers – and plan to open around 15 new stores next year! If every one of those customers just had £1 in there “yellow money” account that is £100,000 of “free” money that Brighthouse can invest – yielding some £10,000 a year in interest FOR THEM!
7 – CONCLUSION
Brighthouse target the poor. Fact! They also know that 100% of their customer base is “sub-prime” – people who can’t get credit by other means. They know that an average customer will just be happy knowing they’re getting some credit and WON’T rock the boat or demand their rights. Brighthouse know this – and that’s how their business works.
Sub-Prime does NOT mean Sub-Human. The customer may not always be right, but the customer is always the customer and the customer has rights – plus he is helping Brighthouse turn over an annual profit in excess of £140 million…
