Rent-to-own company Buy As You View is to pay compensation to almost 60,000 of its customers after an investigation by the financial regulator found the firm had treated them unfairly.
The Financial Conduct Authority (FCA) looked into claims that Buy As You View, which is a trading name of Dunraven Finance Ltd and rents out TVs, furniture, washing machines and more on hire purchase, was not treating those who had fallen behind with payments fairly, or setting out fees clearly.
The firm has now agreed to pay compensation to three sets of customers, and also to change the way it uses payment meters, so customers in arrears are now given 14 days' notice before their TV is blocked. Previously, when payments were not made, power to a customer's TV was temporarily interrupted until a suitable payment or arrangement was made.
Here's what you need to know and how to check if you're owed compensation. See our Consumer Rights guide for more on your legal rights.
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Who will get compensation?
Buy As You View, which is based in Bridgend, South Wales, and has been trading since 1972, has agreed to pay the following compensation:
- 58,232 customers who were charged for unpaid direct debits between 2001 and September 2015 will share £706,000.
- 1,610 customers who paid a 'refinance' charge of between £30 and £45 between November 2012 and March 2014 will share £74,000.
- 3,877 customers who paid more because they were sold extra items under modified credit agreements rather than new credit agreements between April 2014 and August 2015 may be eligible for some of the remaining £159,000. The company will contacted them directly to assess whether they lost out.
The amount of compensation each customer will get will vary depending on how much they originally paid. It should be paid by the end of the year.
How do I claim compensation?
Buy As You View says it will start contacting directly-affected customers within the next two weeks.
- If you're owed compensation because you were charged for an unpaid direct debit or paid a 'refinance' charge, you don't need to take any action. You'll either be sent a cheque for the compensation or it'll be knocked off your outstanding balance if you still owe the firm.
- If you're one of the 3,877 customers contacted after being given a modified credit agreement between April 2014 and August 2015, make sure you respond to Buy As You View to be considered for compensation. Your case will then be assessed – the modified agreements meant the weekly cost was lower but the overall cost was higher, and there are concerns customers weren't always told this.
Over the next 12 months, Buy As You View will also be contacting any customers found to have been lent more than Buy As You View's own lending criteria allows. They may be eligible for additional compensation at a later date.
Buy As You View has a help page that includes information for people who think they might be owed compensation. If you have any questions or need to update your contact details so the firm can reach you, email CET@bayv.co.uk or call 0800 020 9970.
'Wider problems in the market'
Jonathan Davidson, the FCA's director of supervision – retail and authorisations, says: "We are pleased that Buy As You View 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 those in difficulty are treated fairly. We will continue, when necessary, to take action against inappropriate behaviour."
The FCA's investigation followed a six-month inquiry by the All Party Parliamentary Group on Debt and Personal Finance, which published a report on it in February last year.
Yvonne Fovargue MP, chair of the All Party Parliamentary Group, welcomed the FCA's action, saying: "After payday lending, this is another area where high cost credit is causing low-income households serious financial stress.
"The regulator now needs to get to grips with wider problems in the market. In particular we are looking for action against the unfair bundling of compulsory warranties and insurances which are exploitative cash cows for firms and often double the total cost to consumers. There need to be fairer alternatives."
What does Buy As You View say?
Graham Clarke, chief executive officer at Buy As You View, says: "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."