The FCA Consultation have announced their final consultation regarding the Rent To Own market, which commences in January with a view to implementation in April 2019. To protect consumers, the FCA has designed a price cap to fit the RTO market, limiting both the cost of the product and the charge for credit. Under the proposed cap, credit charges cannot be more than the cost of the product. In addition, RTO firms will need to benchmark the cost of products against the prices charged by 3 other retailers. https://www.fca.org.uk/news/press-releases/fca-proposes-introduction-price-cap-rent-own-firms-protect-vulnerable-consumers-high-costs
Andrew Bailey, Chief Executive of the Financial Conduct Authority said:
'Today’s measures are designed to bring down very high prices in the rent-to-own sector, which is used by some of the most financially vulnerable in our society. A cap will prevent firms charging over the odds for essential everyday items like cookers or washing machines. We believe a cap is the only intervention that will effectively tackle the highest prices. If implemented it will save consumers up to £22.7m a year from excessive charges.
'We want to stop consumers having to pay many multiples more than the price of a product on the high street. These changes build on the measures we have already taken across the high-cost credit sector.'