Hire purchase retailer Dunraven Finance Ltd, that trades as Buy As You View (BAYV), is to pay £939,000 in compensation to some 60,000 customers. The regulator, the Financial Conduct Authority (FCA) intervened over what it saw as unfair treatment of the firm’s customers. This action follows the findings of a Skilled Person who was appointed to review the firm’s practices.
The firm offers furniture and electronic goods under hire purchase agreements, and was found to have failed to explain its fees sufficiently clearly to customers, and not treated customers in arrears fairly. Many BAYV customers rented television sets based on a prepayment meter, so their TVs switched off when they were deemed to have missed a payment.
Redress will be paid either in cash, or as a balance write down.
• 58,232 customers will receive compensation totalling £706,000 for fees charged for unpaid direct debits, dating back as far as 2001
• 1,610 customers will receive compensation totalling £74,000 for administration fees of between £30 and £45 for a re-financing arrangement used by BAYV between November 2012 and March 2014
The firm has also agreed not to switch off customer’s TVs until 14 days notice has been given of a missed payment.
An additional 3,877 customers will be contacted by BAYV so the firm can ascertain whether they are due any compensation, which could in total amount to as much as £159,000. These customers were all sold additional goods by BAYV under modifying credit agreements, when instead the firm should have drawn up a new agreement for each item. Customers may have paid more under the modifying agreement than would have been the case under a new agreement.
All compensation will be paid by the end of 2016, and the firm will be contacting all affected customers by April 6 2016.
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 assessments and making sure that those in difficulty are treated fairly. We will continue, when necessary, to take action against inappropriate behaviour.”
BAYV chief executive Graham Clarke said:
“We have worked closely with the FCA in recent months to address these issues and I am sorry to any of our customers who may have experienced difficulties as a result of us not achieving the high standards we set ourselves.
“We have gone further than the recommendations in the review by making additional changes to our operations. As we continue on our transformational journey, our aim is to be the most responsible lender in the sector.”
This may not be the end of the FCA’s action against the firm, as the Skilled Person is now examining credit and affordability checks conducted by the firm, amid concerns that some customers have received amounts in excess of BAYV’s lending criteria. Hence the firm may need to pay additional redress at a later date.
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