I wrote about unregulated ‘rent-to-own firms’, and I thought that it was only a matter of time before this was reined in and regulated in a similar way to payday companies. I correctly predicted that would happen, and the Financial Conduct Authority (FCA) has launched a crackdown on high interest ‘rent-to-own firms’.



The Financial Conduct Authority (FCA) has spent nearly two years looking at the cost of high interest borrowing and has now outlined a package of plans for rent-to-own, doorstep lending and catalogue shopping amid concerns that they are fuelling problem debt.

High-cost credit is used by three million people in the UK.

Single-parents aged 18 to 34 are three times more likely to have a high-cost loan such as a payday loan, doorstep loan or pawn broking loan than the national average.

“The proposals will benefit overdraft and high-cost credit users, rebalancing in the favour of the customer,” said FCA chief executive Andrew Bailey.


The FCA said it had seen cases when people had ended up paying more than £1,500 for essentials like an electric cooker that could be bought on the high street for less than £300.

“The FCA believes the harm identified in this market is sufficient in principle to consider a cap on rent-to-own prices. It will now carry out the detailed assessment of the impact that a cap could have on the rent-on-own sector and how it might be structured,” the regulator said.

Such a cap would not be in place before April 2019.

The most vulnerable and those that can least afford this type of credit with no stable source of income have been exploited by not being able to obtain credit from high street electrical stores and conventional lenders.


The FCA are also going to rein in doorstep lenders and introduce measure to stop loans being rolled over and raised with little or no questions being asked. I believe that the FCA needs to regulate other aspect of high cost credit including car finance firms that target and exploit vulnerable consumers.

It’s clear to me that the most vulnerable in society have been exploited. This industry has gained traction with no scruples, morals or ethics whatsoever so this is long overdue.

Do you think there needs to be a wider crackdown on high interest firms? Have you used rent-to-own firms or doorsteps lenders? If so, what was your experience?

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