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FCA reveals ‘concerns’ with rent to own and extends payday loan price cap

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  • 31/07/2017
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FCA reveals ‘concerns’ with rent to own and extends payday loan price cap
The Financial Conduct Authority (FCA) has identified “particular concerns” within the rent to own market and will consult on plans to tackle them.

The regulator also identified issues with the rent-to-own, home-collected credit and catalogue credit sectors as part of its consumer credit review.

“While there are similarities between high-cost credit markets and products, there are also significant differences in how they work and how people use them,” it said.

“The FCA is developing tailored solutions to these issues, and will consult on action to address these concerns in Spring 2018.”

The FCA is also extending its payday loan price cap until 2020, when it will review the cap again.

Its review found “clear evidence that FCA regulation of high-cost short-term credit (often known as payday lending) has delivered substantial benefits to consumers”.

The FCA said it found that 760,000 borrowers in this market were saving a total of £150m per year and that firms were much less likely to lend to customers who could not afford to repay.

It also reported that debt charities were seeing far fewer clients with debt problems linked to high-cost short-term credit.

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