|"I stopped buying food and paying rent. I didn't tell the lender I was struggling because I felt embarrassed and ashamed."||"The rep got the cash out and it was on the coffee table while we were talking. He mentioned the interest rate, but I would have agreed to anything with the cash on the table."|
Citizens Advice is calling on the Financial Conduct Authority to make sure that consumer credit markets work well for people and don’t trap them in a spiral of debt.
Why things need to change
Citizens Advice helped more than 350,000 people with their debts last year and 3.5 million people got help with their debts on our website. Often these debt problems are a symptom of wider financial insecurity. The majority of people we help with debt problems get into financial difficulty due to a change in circumstances.
It’s always important to make sure consumer credit markets work well for people. In the context of stretched household finances, that’s more important than ever.
What we are doing
We’re calling for changes to the regulation of credit card and high-cost credit markets that would help stop people getting into a debt spiral. In particular we want the Financial Conduct Authority to:
- Stop credit card lenders from pushing people into debt by stopping unrequested credit limit increases.
- Protect high-cost credit customers from spiralling debts by extending similar protections to the payday loan cap to the rent-to-own and doorstep lending markets.
When people’s finances are stretched they’re more likely to need to borrow to make ends meet. Credit products should not push them into difficulty when they do.
End of the rent-to-own rip-off? City watchdog brings in price cap to protect thousands of vulnerable customers
Mail Online, 05/03/2019,Grace Gausden
The Mail Online said Citizens Advice helps around 5,000 people a year with rent-to-own issues.
The FCA's announcement of a price cap on these agreements should save consumers millions of pounds a year. The new measure should protect vulnerable customers and stop people paying more in interest than the original cost of the item.
Gillian Guy told the Mail Online: "This cap, which we've campaigned for, is a win for those struggling with the runaway costs of rent-to-own agreements. We're delighted it will now be introduced."