BrightHouse is working to recover sales, but the rent-to-own sector is still taking hits from FCA rulings
BrightHouse is believed to be investing in new technology that will speed up its sales process after taking hits from the Financial Conduct Authority (FCA), but a report on the company's operations is rumoured to be published this week, raising fears of bondholders.
Formerly known as Crazy George's, BrightHouse is part of a controversial industry that sells electricals on high-interest repayment plans to low-income families.
A spokesperson for the company declined to comment.
Read more: Brighthouse getting its house in order
The FCA is investigating the sector over alleged overcharging and hard-sell tactics. It has worked with BrightHouse and the two other industry leaders, Buy as You View and Perfect Home, to clear concerns around affordability assessments, price transparency and arrears handling and forbearance.
BrightHouse owes bondholders £220m in notes due for refinancing in 2018, but the FCA's investigations into the sector raises questions about the company's ability to pay.
Read more: Meet the 18 companies joining the FCA's regulatory sandbox
The FCA has ruled that rent-to-own companies like BrightHouse must check their customers' finances more carefully before lending, meaning more customers are disqualified or walking away from the longer process.
Currently, the FCA is deciding whether to allow retailers to have full authorisation to operate after taking over regulation of the sector two years ago. Independent assessments are due to be completed in early 2017.