MP welcomes cap for rent-to-own firms
An MP from the borough has hailed the announcement of a new 100 per cent price cap on products being sold by rent-to-own firms.
Makerfield elected representative Yvonne Fovargue, who chairs the all-party parliamentary group on debt and personal finance, said this was a move she and fellow MPs had been looking to see introduced for several years.
Firms such as BrightHouse supply furniture, TVs and household goods such as washing machines to low-income households but there has been widespread concern that poor customers end up facing unnecessary and exorbitant payment packages with sky-high interest rates.
The cap, which has been announced by the Financial Conduct Authority (FCA), will be introduced next April.
Ms Fovargue said: “I welcome the confirmation from the FCA that they will introduce a 100 per cent price cap on rent-to-own products.
“I am pleased to see that rent-to-own firms will be required to benchmark their prices against mainstream retailers and will prevented from hiking insurance premiums or warranty costs as a way of maintaining their total take from customers.
“These were all recommendations made by our all-party group back in 2015, after we undertook a full-scale inquiry into the sector, and it is good to see that the regulator now agrees.
“I am hopeful that this will mean an end to the fleecing of vulnerable customers, though the changes will have to be closely monitored to see how they work in practice.”
Ms Fovargue has been concerned about rent-to-own firms for some years as she worked with households on the breadline as a Citizens Advice Bureau employee before going into Parliament.
The three biggest companies in the sector were believed to have around 350,000 customers between them when MPs looked into rent-to-own.