Posted by Luke Venner on February 5, 2018
The Financial Conduct Authority (FCA) is considering a clampdown on companies that provide high-cost credit to consumers. This could include imposing a cap on interest rates charged.
Such a move would be a follow up to the FCA’s 2015 clampdown on the high interest rates charged by so-called “payday” loan companies.
It is understood that any new proposals will be targeted at home-collected loan firms, household appliance rental companies, and catalogue credit.
More details about the measures are expected to be included in a spring consultation, with particular emphasis on company practices where consumer-borrowers are exploited. The FCA says it will look at alternatives to high-cost credit.
The watchdog is concerned that consumers who use high-cost credit are paying far too much for household goods through their loan repayments.
The FCA says it also remains concerned about charges by banks for unarranged overdrafts, and plans to look at this in more detail in a retail banking review later this year. Banks now have to warn people before they slip into overdraft.
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