Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, if his Department will make an assessment of the potential merits of (a) capping interest rates and (b) other further regulation in the rent-to-own sector.

The government transferred the regulation of consumer credit, including rent-to-own, to the Financial Conduct Authority (FCA) in 2014.

The government has given the FCA strong powers to protect consumers, including the power to cap all forms of credit, and the FCA can do so if it thinks it is necessary to protect consumers. In 2015, the FCA capped the cost of payday lending, and the FCA has said that it will keep the issue of capping the cost of credit in other markets under review.

The government welcomes the ongoing work of the FCA to review the high-cost credit market, including the rent-to-own sector. The FCA published a feedback statement in July 2017, noting concerns in rent-to-own, catalogue credit, home-collected credit, and overdrafts. The FCA aims to consult on proposed remedies in Spring 2018.

The FCA recently announced that BrightHouse, a rent-to-own firm, will pay over £14.8 million in redress to 249,000 customers in respect of agreements which may not have been affordable, and payments which should have been refunded.