The Financial Conduct Authority (FCA) has today confirmed it will introduce a price cap on the rent-to-own market from 1 April 2019.
Jane Tully, director of external affairs at the Money Advice Trust, the charity that runs National Debtline, said: “The introduction of a price cap in the rent-to-own sector is a welcome move and should go some way in reducing harm from the high prices associated with these products.
“As we saw with the regulator’s intervention in the payday loan market, it is clear that the regulator is taking seriously problems with high-cost credit.
“As ever it is crucial that the FCA monitors the impact of these interventions – I am pleased to hear that they have brought forward a review of their effectiveness and are prepared to ‘intervene again’ if problems persist.
“These interventions are however only one part of the solution. A continued focus on alternatives to high-cost is needed to help in particular those households who are often on low-incomes. Momentum is beginning to build in this area with the FCA’s work and the Government’s decision to explore a possible No Interest Loan Scheme. However a concerted effort is needed to address the lack of affordable credit options.”