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Rent-to-own cap a win for people paying over the odds, Citizens Advice says

The FCA’s announcement it will cap the cost of rent-to-own goods from 1 April 2019 will help the hundreds of thousands of people who use the high-interest agreements, Citizens Advice says.

The charity helps approximately 5,000 people a year with rent-to-own issues. It has also welcomed the decision by the regulator to place restrictions on other charges, including late payment fees.

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

Gillian Guy, Chief Executive of Citizens Advice, said:

“This cap, which we’ve campaigned for, is a win for those struggling with the runaway costs of rent-to-own agreements. We’re delighted it will now be introduced. 

“The FCA has recognised the massive harm caused by the crippling interest rates on rent-to-own deals. This cap will stop people from paying over the odds compared to similar products on the high street and falling into further debt when costs spiral out of control. 

“Our evidence has repeatedly shown well-designed caps can reduce the harm high-cost credit can cause. Where these credit products cause more harm than good, for example doorstep loans, the FCA should move to introduce similar protections.”

FCA confirms introduction of rent-to-own price cap

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. Our network of charities offers impartial advice online, over the phone, and in person, for free.

  3. We helped 2.6 million people face to face, over the phone, by email and webchat in 2017-18. And we had 25 million visits to our website. For full service statistics see our monthly publication Advice trends.

  4. Citizens Advice service staff are supported by more than 22,000 trained volunteers, working at over 2,500 service outlets across England and Wales.

  5. Citizens Advice is the largest provider of free, multi-channel debt advice. Providing that help gives Citizens Advice unique insight into the types of debts people struggle with.

  6. 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.

Original article link: https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/rent-to-own-cap-a-win-for-people-paying-over-the-odds-citizens-advice-says/

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