Call to cap the cost of doorstep loans raised with the Prime Minister
In today's Prime Minister's Questions, the MP for Horsham, Jeremy Quin, asked the Prime Minister if she would agree that now is the moment for the FCA to extend the payday loan cap to doorstep lending.
The Prime Minister replied that the Government "are committed to ensuring that consumers are protected from unfair lending practices" and has "given the FCA new powers to cap the cost of credit and they'll do so if they believe it's necessary to protect consumers".
In response, Citizens Advice Chief Executive, Gillian Guy, says:
"Our evidence is clear - there's a need for a cap on the cost of rent-to-own and doorstep loans. As the Prime Minister highlighted today, the FCA has the powers to cap the cost of these forms of credit and better protect those consumers who are falling victim to their high costs.
"We know the easy refinancing of doorstep loans can lead to problem debt. Our figures show that 1 in 2 of the people we helped with rent-to-own debts borrowed again in order to meet their repayments.
"People should never have to pay back more than twice what they borrow, which is why we're calling for the FCA to use their high-cost credit review to put in place a cap in these markets.
"The government's payday loan cap more than halved the number of people with unmanageable payday loan debts. By extending this cap to doorstep lending and rent-to-own, our research shows the FCA could protect consumers from paying up to £165 million a year."