Cap on high cost credit across loans, credit card and wider sector should be reconsidered, MPs say
Today, a report by the Treasury Committee into household finances urged the City watchdog to "urgently" press on with plans to put a limit on high cost credit
A CAP on high cost credit should be reconsidered by the regulator, MPs have warned.
In May, the Financial Conduct Authority (FCA) announced plans to crack down on "exceptionally high" rent-to-own products by putting a cap on interest and fees.
The FCA also announced plans to ban banks from charging higher fees for unarranged overdrafts as well as stricter rules for doorstep lenders.
Today, a report by the Treasury Committee into household finances urged the City watchdog to "urgently" press on with plans to put a limit on high cost credit.
It added: "When it comes to review the impact of these proposals after they are implemented, it should reconsider whether a wider cap on high-cost credit, and compulsory restrictions on unsolicited credit limit increases, are needed."
In March, The Sun launched its Stop The Credit Rip-Off campaign to help the millions of families who fall prey to doorstep and legal high street loan sharks.
This newspaper has called for the Financial Conduct Authority to put a cap on repayable costs for both rent-to-own and doorstep loans so customers never have to pay back more than double the amount they borrow.
The FCA now plans to implement changes to the rent-to-own sector by April 2019.
It has not given a timeline for when other rules may be put into place.
Rent-to-own customers are set to save hundreds of pounds on items when a cap is imposed.
Last week, we revealed how rent-to-own firms continue to charge customers hundreds of pounds for 'useless' warranties.
An FCA spokesperson said: “We note the report with interest. We have already identified issues in the high-cost and overdraft markets and are working to implement solutions as quickly as possible.”
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A similar cap was introduced for payday loans in 2015 and since then the number of people struggling with unmanageable debts to those lenders has more than halved, according to Citizens Advice.
The report by MPs also called for more help for people to deal with debts and savings for retirement.
It called for the "complex" Lifetime Isa to be scrapped and for auto-enrollment on pensions to be extended to self-employed workers.
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