Business

The FCA should impose a price cap on rent-to-own companies

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The City regulator should deal with the industry the same way it did with payday lenders and target all forms of high-cost credit

The Financial Conduct Authority did a fine thing when it imposed price caps on payday lenders two years ago. The policy was popular and addressed obvious abuses. It was also well-crafted: payday lenders did not disappear altogether, which might have caused even nastier operators to fill the demand, but the survivors were obliged to clear up their acts.

The regulator should take its cue from that success and see if there is a robust way to design a price cap for rent-to-own companies such as BrightHouse that provide household goods via hire purchase agreements at sky-high rates of interest.

Continue reading…Original Article

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