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University of Nottingham
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Professor John Gathergood worked with the Financial Conduct Authority (FCA) to design and implement research into the effect on consumers of using rent-to-own financial products.

This resulted in a consultation paper, published by the FCA in November 2018, which ultimately led to a policy proposal to limit product pricing and interest charges in the rent-to-own market.

In March 2019 the FCA announced the introduction of a price cap to protect some of the most vulnerable customers in the UK in the rent-to-own (RTO) sector.  The cap, which was introduced from 1 April 2019, was estimated to save consumers in the UK up to £22.7 million a year.


The measures included:

  • setting a total credit cap of 100%
  • introducing a requirement on firms to benchmark base prices (including delivery and installation) against the prices charged by three mainstream retailers
  • preventing firms increasing their prices for insurance premiums (such as theft and accidental damage cover), extended warranties, or arrears charges, to recoup lost revenue from the price cap.​​​​​

As a result of the Covid-19 pandemic, the FCA announced temporary guidelines in April 2020 (updated in July 2020), which addressed payment referrals with rent-to-own, buy-now-pay-later and pawnbroking agreements.



Posted on Wednesday 19th December 2018

NIBS - Network for Integrated Behavioural Science

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