Price cap is put on rent-to-own goods

A PRICe cap on rent-to-own goods will save customers millions of pounds per year on the cost of everyday products such as fridges, cookers and televisions, from next month.

The cap will be introduced from April 1 and will save consumers in the UK up to £22.7m a year, the Financial Conduct Authority (FCA) said.

The FCA says the cap means credit charges cannot be more than the cost of the product.

Currently, rent-to-own consumers can pay more than four times the retail price of some goods – a £500 cooker could end up costing more than £1,700 but that will now be capped at £1,000 at most.

Christopher Woolard, executive director of strategy and competition at the FCA, said: ‘The actions we are taking will save some of the most vulnerable consumers in the UK millions of pounds.’

Citizens Advice helps around 5,000 people a year with rent-to-own issues. Chief executive Gillian Guy said: ‘This is a win for those struggling with the runaway costs of rent-to- own agreements. We’re delighted it will now be introduced.’