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
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.
Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers.
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.
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To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
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