Paradise Papers: Queen invested in rent-to-buy firm BrightHouse criticised for making the poor 'pay a poverty premium'

The Duchy of Lancaster, which manages the Queen's private estate, invested in the company via an offshore fund

Caroline Mortimer
Monday 06 November 2017 15:35 GMT
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Rent-to-own retailers such as BrightHouse have been accused of forcing people to take out expensive warranties and insurance
Rent-to-own retailers such as BrightHouse have been accused of forcing people to take out expensive warranties and insurance

The Queen is a small investor in rent-to-own chain BrightHouse which has been criticised for its business model which charges high interest on furniture to some of the country’s poorest people.

Leaked documents from two offshore service providers show that the monarch was just one of hundreds of wealthy figures from the UK and across the world who have money tied up in 19 tax havens.

The Duchy of Lancaster, which manages the private estate of the Queen, invested £10m of her estimated £500m private fortune in the Watford-based firm which was recently forced to pay £14.8m back to its customers after the Financial Conduct Authority (FCA) found it was not operating as a “responsible lender”.

The firm charges up to three times more than high street lenders for regular household items such sofas, beds or white goods, by offering customers high rates of interest over weekly instalments.

Critics say this allows them to force the poorest in our society, who cannot pay £200 upfront for a washing machine, to “pay a poverty premium”.

The FCA did not specifically fine the company for this policy but instead said it had failed to properly assess whether its customers were able to repay their finance.

The firm was is one of many high-interest lenders providing small loans to people on low incomes.The number of rent-to-own stores rose 140 per cent between 2008 and 2016 in the UK as more people used credit to pay for essentials.

Gareth Evans, the director of Financial Inclusion Centre, told The Independent last year: “These firms continue to litter the high streets of our most deprived towns and cities, making hundreds of millions of pounds of profits from the growing numbers that don’t have any other options but to pay a poverty premium when borrowing.

“It’s not just the huge costs, but most customers are required to take out expensive warranties and insurances they don’t want or need and worrying numbers struggle to keep up with repayments resulting in the goods being repossessed.”

Speaking to the BBC, the Duchy said it was not aware of its 12-year investment in the firm which it said amount to just over £3,000.

There is no suggestion that the Duchy did anything illegal or that the Queen was directly involved in choosing to move money offshore.

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