RTO Firms Face New Regulations in 2019

  • FCA proposes rent-to-own market price cap to protect vulnerable consumers
  • Price cap to control prices and limit credit charges
  • Credit charges cannot exceed product cost
  • RTO firms must benchmark products against other retailers’ prices
  • No increase in insurance premiums or arrears charges to recoup lost revenue

The Financial Conduct Authority (FCA) is consulting on introducing a price cap in the rent-to-own (RTO) market to address harm caused by high prices and protect vulnerable consumers. The proposed price cap, set to take effect on April 1st, 2019, aims to control prices by limiting both the cost of products and credit charges. Under this cap, credit charges cannot surpass the product’s cost, and RTO firms must compare their products’ costs with those of three other retailers. Additionally, FCA’s rules prevent firms from increasing insurance premiums or arrears charges to compensate for lost revenue due to the price cap. The statement says, ‘The draft rules will apply from April 1st, 2019 to new products introduced by RTO firms and existing ones either at the time of a price change or after three months since the rules’ enforcement (whichever is earlier).’

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about the FCA’s proposal to introduce a price cap in the rent-to-own market. It explains the details of the proposed cap, its implementation timeline, and how it will affect RTO firms and their products. There is no sensationalism, redundancy, or personal perspective presented as fact.
Noise Level: 2
Noise Justification: The article provides relevant and accurate information about the FCA’s proposal to introduce a price cap in the rent-to-own market. It explains the details of the proposed cap and its implementation timeline, as well as the impact on insurance premiums and arrears charges. The article stays on topic and supports its claims with specific details from the FCA’s statement.
Financial Relevance: Yes
Financial Markets Impacted: Rent-to-own industry
Financial Rating Justification: The article discusses a proposed price cap on rent-to-own products, which would impact the financial aspects of the RTO market and companies operating in it.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk