answer text |
<p>The Government transferred the regulation of consumer credit, including rent-to-own,
to the Financial Conduct Authority (FCA) in 2014 and has given the FCA strong powers
to protect consumers. This was demonstrated by the FCA announcement in October 2017
that BrightHouse, a rent-to-own firm, would 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.</p><p>The Government has also given the FCA the power
to cap all forms of credit, and the FCA can do so if it thinks it is necessary to
protect consumers.</p><p>The FCA’s review of the high-cost credit sector has identified
concerns about the high costs of rent-to-own borrowing for what is a particularly
vulnerable consumer group, and the consequences of that borrowing. The Government
welcomes the FCA’s ongoing work to review the high-cost credit market, including the
rent-to-own sector. The FCA aims to consult on proposed remedies in spring 2018.</p><p>The
FCA has consulted on proposed rules and guidance on staff incentives, remuneration
and performance management in consumer credit firms, and published final rules on
27 March 2018. The rules will require firms to identify and manage risks arising from
remuneration and performance management practices, and will come into force on 1 October.</p>
|
|