Rent-to-Own Firm Fined for Unfair Lending Practices

  • PerfectHome ordered to refund £2.1m to customers issued unaffordable loans
  • FCA identified inadequate affordability assessments and unfair collections processes
  • Around 2,425 customers with unaffordable loans will have debts written off and become owners of goods
  • CEO apologizes and promises personal letters to affected customers for redress payments

Rent-to-own company PerfectHome has been ordered by the Financial Conduct Authority (FCA) to refund £2.1 million to customers who were issued loans they couldn’t afford. The FCA found that PerfectHome’s affordability assessments did not consider customer circumstances properly and their collections processes didn’t always deliver good outcomes for customers, leading to some being charged late fees on insurance contracts against the firm’s policy. PerfectHome has identified affected customers and will refund them accordingly. Jonathan Davidson, FCA executive director, emphasized responsible lending and fair treatment of vulnerable consumers. Around 2,425 customers with unaffordable loans defaulting will have their debts written off and own the goods they initially bought with loans.

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about the FCA’s order for PerfectHome to refund customers, the reasons behind it, and the company’s response. It includes quotes from relevant sources and does not contain any irrelevant or sensational details, repetitive information, or personal opinions presented as facts.
Noise Level: 3
Noise Justification: The article provides relevant information about a company being ordered to refund customers due to unfair lending practices and the actions taken by the Financial Conduct Authority. It also includes statements from the CEO of PerfectHome apologizing for their mistakes. However, it could provide more details on how this issue came to light and the broader implications of such practices in the industry.
Financial Relevance: Yes
Financial Markets Impacted: Rent-to-own firm PerfectHome and its customers
Financial Rating Justification: The article discusses a financial company (PerfectHome) that has been ordered to refund money to customers due to issues with affordability assessments and collections processes, impacting the customers financially. It also mentions the involvement of the Financial Conduct Authority (FCA), which is related to financial regulation.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event in the text, but the financial crisis mentioned is minor as it involves refunding £2.1m to customers and adjusting debts for unaffordable loans.

Reported publicly: www.retailsector.co.uk