FCA orders rent to own provider to redress 59,000 customers
Dunraven Finance Ltd, trading under the name Buy as You View (BAYV), has agreed to pay out compensation of £939,000 after the FCA identified concerns of historic unfair treatment to its customers.
The FCA identified concerns with BAYV’s policies and procedures across a number of areas, such as fees which were not clearly set out to customers, the fair treatment of customers in arrears, and the manner in which BAYV uses payment meters to restrict access to the customer’s TV when payments are not received on time. Concerns were also raised over the robustness of the firm’s creditworthiness assessments.
In response to this an independent Skilled Person was appointed in October 2015 to review and monitor the firm’s plans to address the concerns raised.
Jonathan Davidson, Director of Supervision – Retail and Authorisations at the FCA said: “We are pleased that BAYV is working with us to address our concerns. It is important that firms meet our standards, including carrying out proper creditworthiness assessment and making sure that those in difficulty are treated fairly. We will continue, when necessary, to take action against inappropriate behaviour.”
BAYV has agreed to pay redress. This will be through a balance write down or cash to customers who have been charged fees for returned direct debits and/or forbearance options. Those who have overpaid because of the impact of a modifying agreement not being fully explained to them may also receive redress. The redress package is as follows:
- 58,232 customers will receive redress as a result of fees applied to their accounts for unpaid direct debits. This covers direct debits charged from 2001.
- 1,610 customers will receive redress in respect of an administration fee historically charged of between £30 and £45 for a ‘Fresh Start Refinance’. Customers who incurred these fees between November 2012, when BAYV published its customer charter, and March 2014 when BAYV ceased this practice will receive redress.
- 3,877 customers who bought goods using modifying agreements between 1 April 2014 and August 2015 (when BAYV ceased using them) will be contacted by BAYV to assess whether they have suffered detriment as a result being sold additional goods by BAYV using modifying credit agreements, instead of using a new separate agreement for each item. Under a modifying agreement the customer would have paid more overall than under separate agreements, but they may not have been aware of this when the goods were sold. Customers will need to respond to the firm’s contact in order for their case to be individually assessed
Further to this, BAYV has changed the way it uses payment meters. A default notice will now be issued at least 14 days prior to restricting access to the customer’s TV.
The FCA also identified concerns about BAYV’s creditworthiness assessment specifically whether BAYV has been lending to customers affordably.
The appointed Skilled Person will monitor BAYV’s reassessment of its lending decisions from 1 April 2014 to the 22 October 2015. Any customers identified as having been lent sums in excess of BAYV’s own lending criteria will receive redress at a later date. BAYV will contact customers impacted as they are identified. We will provide a further update on this once this exercise is completed.