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Rent-to-own cap a victory for struggling families, Citizens Advice says

The FCA’s decision to cap the cost of rent to own goods will help hundreds of thousands of people who use the high-interest agreements, Citizens Advice says.

The charity has also welcomed the decision by the regulator to place restrictions on other charges, such as warranties, insurance and arrears.

Previous research from Citizens Advice found that people who were at the time signed up to a rent-to-own agreement could save £62 million on 245,000 products if a cap was enforced.

Gillian Guy, Chief Executive of Citizens Advice, said:

“This cap is a victory for people who struggle with the runaway costs of rent-to-own agreements.

“These products are aimed at people who have little choice but to resort to this type of credit, yet they come with crippling interest rates on prices that are far higher than anywhere else on the high street.

“A cap gets to the heart of the problem by stopping costs from spiralling out of control and pushing people into further debt.

“Our evidence has repeatedly shown that well-designed caps can reduce the harm high-cost credit can cause, as they have done in the payday loan market.”

Notes to editors

  1. Citizens Advice is made up of the national charity Citizens Advice; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.

  2. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers.

  3. Citizens Advice is the statutory consumer advocate for energy and postal markets. We provide supplier performance information to consumers and policy analysis to decision makers.

  4. The Citizens Advice Witness Service provides free and independent support for both prosecution and defence witnesses in every criminal court in England and Wales.

  5. Citizens Advice also offers Pension Wise appointments at 500 locations across England and Wales.

  6. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.

  7. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk

  8. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.

  9. We helped 2.6 million people face to face, over the phone, by email and webchat in 2017-18. For full service statistics see our monthly publication Advice trends.

  10. Citizens Advice service staff are supported by more than 23,000 trained volunteers, working at over 2,500 service outlets across England and Wales.

FCA proposes introduction of price cap on rent-to-own firms to protect vulnerable consumers from high costs

Original article link: https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/citizens-advice-responds-to-high-cost-credit-review/

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