November 2018

FCA proposes cost of credit cap in rent to own sector

The Financial Conduct Authority (FCA) has proposed a price cap in the rent to own (RTO) sector for domestic goods. The cap, which follows a successful similar scheme introduced in the payday lending sector, will come into force on 1st April 2019 and will restrict credit charges to no more than the price of the product itself.

Under the new measures, RTO firms will also be required to benchmark the cost of their products against the market when setting prices and will also be required to provide a two day cooling off period for extended warranties.