MSE News: Rent-to-own sector faces price cap as high-cost credit reforms proposed

Former_MSE_Callum

The financial regulator has announced new proposals designed to protect millions of people who use overdrafts and high-cost credit - and hopes they could save consumers more than £200m a year...

Read the full story:
'Rent-to-own sector faces price cap as high-cost credit reforms proposed'

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The_Real_Cheddar_Bob

Excellent news. In my youth I was caught foul of available balance.....

Coveredinbees!!!!

It's all the entitled wanting everything they can't afford now. Anyone with any sense would never buy on these 'deals'.

Anthorn

I see that the financial regulator has avoided upsetting the banks by not taking action against unplanned overdrafts many of which are more expensive than payday loans and the likes of Brighthouse.

If as a result of the regulator's action the likes of Brighthouse are put out of business what replaces it? What about the single parent who has their cooker breakdown beyond repair and has to cook for her six kids? Are the banks going to help her out?

There is the great white hope against payday and doorstep lenders which turned into the great white elephant, the credit unions. Many of them are savings heavy while being loans light: Well meaning people save with them to help out those who are less fortunate than themselves but the money doesn't get loaned out!

By all means take action against exorbitant terms levied upon those who are less fortunate, everyone will applaud that. But before that's done make sure there is something to replace it. If that's not done then hardship is increased as people in need are driven to underground illegal lenders!

Anthorn

venison wrote: »

I got the impression from the TV news report that unplanned O/Ds would be included but NOT doorstep lenders like provident.

The news itself is developing and changing as it usually does when public opinion is the target. When I saw the news this morning it was rent-to-buy and steep interest rates from pay-day lenders and doorstep lenders while action against unplanned overdrafts "would come later". Now on the ITV News At Ten which I am watching as I write this, the focus is on rent-to-buy with Brighthouse highlighted and unplanned overdrafts stating that the banks are likely to take legal action against any enforced cap on their charges. According to ITV News any action whatever it is will take a year or more to implement with an FCA spokesperson stating that it will take some time because the FCA itself has to act within the law.

My original statement in this thread still holds true: If rent-to-buy such as Brighthouse is driven out of business and there is no replacement for it, people in need will be driven to underground illegal lenders with the result that the action by the FCA will increase hardship and not reduce it.

[Deleted User]

Or people could just do the sensible thing and join a credit union save a couple of quid a week then have low cost loans available for when they need a second hand washing machine.

antrobus

Anthorn wrote: »

I see that the financial regulator has avoided upsetting the banks by not taking action against unplanned overdrafts many of which are more expensive than payday loans and the likes of Brighthouse....

Do you mean unauthorised overdrafts?

Anthorn wrote: »

The news itself is developing and changing as it usually does when public opinion is the target. When I saw the news this morning it was rent-to-buy and steep interest rates from pay-day lenders and doorstep lenders while action against unplanned overdrafts "would come later". Now on the ITV News At Ten which I am watching as I write this, the focus is on rent-to-buy with Brighthouse highlighted and unplanned overdrafts stating that the banks are likely to take legal action against any enforced cap on their charges. ..

No, the news has neither developed nor changed today. The focus has always been on rent-to-buy, You were just paying insufficient attention. The FCA have already price capped pay-day lending, so they don't need to do it again.

P.S. I think you should stop referring to unauthorised overdrafts as 'unplanned' overdrafts. (I assume that's what you're doing.) Helping yourself to someone else's money may well be the result of a lack of planning, but it really should come with some kind of financial penalty. In the past, French banks have been known to have responded to attempts at cheque kiting, by not only bouncing 'em, but reporting it to the gendarmes as attempted theft.:)

System

Anthorn wrote: »

If as a result of the regulator's action the likes of Brighthouse are put out of business what replaces it? What about the single parent who has their cooker breakdown beyond repair and has to cook for her six kids?

She does what we had to do and get a cheap second hand one out of the newspaper or local Facebook stuff for sale page.

glider3560

Coveredinbees!!!! wrote: »

It's all the entitled wanting everything they can't afford now. Anyone with any sense would never buy on these 'deals'.

There was a TV report on this yesterday. The person they were reporting about had a Dyson vacuum, branded iron, branded kettle, etc all on hire purchase.


Completely no need. I bought a £15 Argos vacuum about five years ago and it still picks up dirt. A £5 kettle and £10 iron. Probably equal to just a couple of weeks payments to Brighthouse, or wherever.

Anthorn

antrobus wrote: »

Do you mean unauthorised overdrafts?



No, the news has neither developed nor changed today. The focus has always been on rent-to-buy, You were just paying insufficient attention. The FCA have already price capped pay-day lending, so they don't need to do it again.

P.S. I think you should stop referring to unauthorised overdrafts as 'unplanned' overdrafts. (I assume that's what you're doing.) Helping yourself to someone else's money may well be the result of a lack of planning, but it really should come with some kind of financial penalty. In the past, French banks have been known to have responded to attempts at cheque kiting, by not only bouncing 'em, but reporting it to the gendarmes as attempted theft.:)

TSB calls it an "unplanned overdraft".
https://www.tsb.co.uk/current-accounts/overdrafts/

Anthorn

Tarambor wrote: »

She does what we had to do and get a cheap second hand one out of the newspaper or local Facebook stuff for sale page.

If she has the money that is. However it's a fact that some people on benefits have to live in the here and now and don't have the money to cope with emergencies. In the abcence of places like Brighthouse she has to get the money elsewhere. Credit Unions are about as difficult as banks for the poor to get finance and so literally the only option is the local illegal doorstep lender.

A better option though is to look out for free items on for example Facebook Marketplace or similar local groups. However I recently offered for free through a local Facebook group an almost new parrot cage and Russel Hobbs kettle and my phone was ringing almost non-stop for hours. But even if she manages to get a free cooker she still has to transport it.

Back to my previous post in this thread: Brighthouse provides a needed service and if it's put out of business it has to be replaced. Sad though that its fate is likely to be decided by those who have never used it and will never have to use it!