A new Cap on the amount Rent to Own products is being introduced from April 2019 the Government has announced. Rent To Own is popular with people on low incomes, however the market has been the focus of Scrutiny as this line of credit can be the most expensive and has been targeted at the poorest in society.
Credit Cap of 100%
The New Cap will mean that companies like Dial A TV, Bright House and Perfect Home will all be forced to change their charges from April 1st.
The changes that will come into affect
- setting a total credit cap of 100%
- introducing a requirement that firms must benchmark product base prices (including delivery and installation, but excluding any add-on products like warranties etc) against retail prices
- preventing firms increasing their prices for other goods and services sold with an RTO agreement – for example, theft and accidental damage cover, extended warranties, or arrears charges – to recoup lost revenue from the price cap