The End Child Poverty coalition is delighted that the Financial Conduct Authority, after its review of the high cost credit market, is recommending the introduction of a cap on the total cost of rent to own goods with added protections for consumers that will limit the ability of companies to recoup the cost through extra add-ons.
Sam Royston, author of End Child Poverty’s report, Feeling the Pinch. Furnishing your Home with Rent to Own said:
‘Today the FCA has made important and welcome proposals to curb the practices of rent to own companies that result in low income and financially vulnerable households struggling to cope with spiralling levels of debt. It isn’t right that those families least able to afford it and who turn to these companies simply in order to have basic household goods such as a fridge, washing machine or beds for their children, can pay more than four times the original cost of the product. The introduction of a cap on the total cost of the goods will help families that in the past have been forced to meet high cost debt repayments and cut back on other expenses such as food, heating and clothes.’
'End Child Poverty has been campaigning for a cap on the total cost of rent to own goods since the launch of its report in November 2017 as it became evident that the freeze on children’s benefits has left many families with the only option of turning to high cost credit in order to furnish their homes with basic items.
‘We believe this will make a real difference to the lives of children growing up in poverty as family finances will be under less strain. We urge the Government to do more to help families by ending the freeze on children’s benefits so that families do not need to seek out high cost credit in the first place.'
- End Child Poverty is a coalition of UK charities, unions and civil society organisations campaigning for an end to child poverty.
- End Child Poverty’s report Feeling the Pinch. Furnishing your Home with Rent to Own is available here
- The FCA’s own analysis shows that customers have in some cases paid up to four times the original cost of products. A statement on its proposals is available here
- For further comment please contact Judith Cavanagh 07918 567577