The FCA have today announced changes it intends to make for the Rent-To-Own and Catalogue sector, similar to those made by it against the Pay day loan industry.
A Two Year study by the FCA into the Rent-To-Own industry
The FCA have been studying the Rent-To-Own industry for the past two years.
It has now outlined changes it expects to make against the industry and that of the Door Step loan industry.
High Interest on rent-to-own and catalogues
In it's findings, the FCA reviewed evidence of High Cost finance that 3 million customers were charged.
It found single parents aged 18-34 were more likely to have a Catalogue or use Rent-To-Own finance.
Campaigners have long called for a Cap on the Interest charged by both Catalogue and Rent-To-Own companies.
In it's report, over 400,000 customers were in debt to Rent-To-Own companies, of them, some were charged interest so high it mean they paid more than double for the cost of the items.
Would a cap on interest affect the ability for those with poor credit?
The new cap on charges however wouldn't be plain sailing. The industry for example are on of the only industries left who do accept Low incomes and poor credit.
Capping interest will result in more customers not having access to vital credit they need. Universal credit is putting an almighty strain on families who need credit to buy household items.
What's your views?
How many jobs will be lost and will a crack down on the industry just mean more customers are frozen out of the finance they need?