We comment on FCA rent-to-own cap rules
5 March, 2019
Today the FCA has confirmed its policy on the introduction of the new rent-to-own price cap rules, following consultation. The new rules take effect in April.
Peter Tutton, Head of Policy here at StepChange Debt Charity, said:
“Thanks to the new rules, a cap on the cost of rent-to-own credit will come into force in April. We welcome the fact that the price cap will apply both to the cost of credit and to the underlying cost of goods that can make these agreements expensive, even compared to other types of high cost credit.
“The Financial Conduct Authority will review how the rules are working in a year’s time – an important activity, as the regulator will need to keep close tabs on how the cap works in practice to avoid high prices continuing to harm consumers.
“However, rent to own and other high cost credit will continue to put a strain on low income households who have little choice but using credit to pay for essential goods. So we are pleased that the Government is looking at the feasibility of a no interest loans scheme for the most hard-pressed households. This important intervention by the FCA still needs to be accompanied by better affordable alternatives to rent to own”.