Rent-to-own operator BrightHouse has entered administration, with fears the stores won’t reopen after the government’s closure of all non-essential shops during the coronavirus.

BrightHouse, the trading name of Caversham Finance Limited, has 240 stores across the UK and employs 2,400 people. The stores offer items such as TVs, fridges and washing machines. BrightHouse’s 200,000 rent-to-own customers make monthly payments for household appliances, in effect renting goods (and paying interest) until they have paid in full.

Customers have been told to continue to make the monthly payments required to keep their household goods, with administrators now acting as the collecting agent.

In 2017 BrightHouse was ordered to pay £14.8 million to 249,000 customers by the financial regulator, Financial Conduct Authority. This was in response to the retailer’s inability to pay customers who had cancelled agreements after one downpayment.

The company at the time was told it had not been a responsible lender. Brighthouse had also been accused of charging excessive interest on lending.

Julie Palmer, from corporate recovery business Begbies Traynor, said: “Coronavirus was the final nail in the coffin for BrightHouse.”

What happens to my appliance?

Brighthouse has told customers they must continue making payments in the usual way.

The company said: “All outstanding rent-to-own and cash loans remain subject to the terms agreed and customers should continue to make payments in the usual way according to the company’s terms and conditions.”

Customers who fail to make payment will face extra charges, according to the retailer.

Announcing a joint administration, the company said: “The Joint Administrators will explore options to increase the value for creditors including an orderly wind down of the businesses’ over time and sale of the assets.”

Servicing, warranties, and insurance claims will continue at present, as will delivery of essential items already ordered, but in line with coronavirus restrictions. These services operated alongside the rent-to-own service.

The statement concluded: “We would like in these uncertain times to do our utmost to ensure the wellbeing of BrightHouse customers and employees. As retail stores have now closed in accordance with Government restrictions, customers who typically would pay in-store are encouraged to use one of a number of quick and easy remote pay options that are available.

“Please visit our website at www.brighthouse.co.uk/managing-your-money/ways-to-pay or call the Customer relations team on 0800 526 069 who can assist you in paying remotely. For any other queries, please contact our Customer relations team on 0800 526 069.”