CURBS ON TV RENTS
A crackdown on the extortionate rates charged by firms flogging rentto-own products such as TVs and washing machines has been confirmed by the City watchdog.
The Financial Conduct Authority is clamping down on how much companies can charge for household essentials, and how much interest they can add for spreading the cost.
From April, people will not pay more in interest than the cost of the item itself, and rent-to-own firms will have to benchmark their product prices against three other mainstream stores.
The FCA is also banning firms from increasing their prices for insurance, extended warranties or arrears charges as a way to recoup lost revenue from the price cap.
The Mirror has highlighted the impact of rent-to-own firms such as Brighthouse and PerfectHome in its Fair Credit for All campaign.
Firms have been found charging up to four times what people would pay if buying outright elsewhere.
It is typically the poorest people, who have low credit ratings, who turn to these companies.
The FCA says its cap will save shoppers up to £22.7million a year.
Christopher Woolard, an FCA director, said: “The actions build on our wider work on high-cost credit and will save some of the most vulnerable consumers in the UK millions of pounds. This price cap has been designed to target some of the most excessive prices.”
Charities and consumer groups welcomed the new rules. Gillian Guy, chief executive at Citizens Advice, said: “This cap is a win for those struggling with the runaway costs of rent-to-own agreements. We’re delighted it will now be introduced.
“The FCA has recognised the massive harm caused by the crippling interest rates on rent-to-own deals.“
A BrightHouse spokesman said: “We remain committed to offering our customers, who are excluded from mainstream credit, great service and the best prices possible for the products they require.
“Over the coming months we will fully implement the changes confirmed today.”
A PerfectHome spokesman said: “As an FCA-authorised business, we will adjust our offering to reflect the new parameters. Our customers will start seeing changes to our agreement terms for new products in the coming weeks. The changes will apply to new agreements only; customers with existing agreements will not be affected.”