BrightHouse, a rent-to-own firm which sold household goods to customers entering a credit agreement, has fallen into administration. From today, it will no longer offer new rent-to-own or cash lending activity.

More than 200 of its shops were closed amid the coronavirus outbreak and it was reportedly struggling before this as it sought to pay compensation claims to customers who were sold goods they couldn’t afford.

Grant Thornton UK LLP has been appointed as administrator of Caversham Finance Limited (CFL), trading as BrightHouse, and Caversham Trading Limited (CTL), which looks after the servicing, warranty and insurance claims of BrightHouse.

What does this mean for existing customers?

Grant Thornton confirms the logistics and engineering business of CTL will continue to help customers who have claims for essential home item repairs. It will also continue to deliver smaller items to customers’ doorsteps, to ensure where possible, customer products remain in working order.

However, this is subject to government guidelines for COVID-19 and will be reviewed by the administrators as it considers the safety of BrightHouse employees and customers.

It added all outstanding rent-to-own and cash loans remain subject to the terms agreed with CFL and customers should continue to make payments in the usual way according to the company’s terms and conditions.

Debt adviser Sara Williams who runs the Debt Camel blog, said customers who have already submitted an affordability complaint are unlikely to get a full refund if they do win.

She added that given the unprecedented coronavirus situation, for customers who still owe BrightHouse some money but think they have a good affordability complaint, they should consider stopping paying BrightHouse anything at all.

“You are likely to be much better off if you stop paying BrightHouse now, than if you carry on paying for a year and then only get a small percentage of your refund back in the end.”

She added that customers can ask for repayments to be lowered if they’re struggling during the pandemic. “You may be worried that the goods may be repossessed. This is very unlikely to happen.

“Repossessing goods at the height of social distancing is going to be very hard. And I expect the administrators would much prefer to get reduced payments from you than have a lot of second-hand items to have to try to sell,” she said.