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High cost credit products must be tackled, say Lords
High cost credit products must be tackled, say Lords
This is a duplicate of the Blog Entry made on: 26th March 2017 07:56
This is a duplicate of the Blog Entry made on: 26th March 2017 07:56
The banks and financial regulators should do more to tackle the vicious cycle of debt and overcharging, says a Lords committee.
The Financial Exclusion Committee says banks are failing the customers who need them the most, leaving the poorest to rely on expensive products. It adds that controls on "rent to own" products and other high cost credit deals must be introduced urgently.Banks should be required to have a duty of care towards their customers. The report highlights how regulation has been successful in battling abusive practices by payday loan companies. The government asked regulators the Financial Conduct Authority to limit the interest rates they are able to charge.
Poverty premium
It calls for similar restrictions to be applied to other forms of high cost credit, charges for unarranged overdrafts and "rent to own" products. These are products that allow customers to buy items, such as televisions or mobile phones, through rental deals which can cost as much as four or five times the normal price tag. Debt charities say that as high cost loan companies have been pushed out, demand for credit by people in poverty has moved into other areas....Read more here
The Financial Exclusion Committee says banks are failing the customers who need them the most, leaving the poorest to rely on expensive products. It adds that controls on "rent to own" products and other high cost credit deals must be introduced urgently.Banks should be required to have a duty of care towards their customers. The report highlights how regulation has been successful in battling abusive practices by payday loan companies. The government asked regulators the Financial Conduct Authority to limit the interest rates they are able to charge.
Poverty premium
It calls for similar restrictions to be applied to other forms of high cost credit, charges for unarranged overdrafts and "rent to own" products. These are products that allow customers to buy items, such as televisions or mobile phones, through rental deals which can cost as much as four or five times the normal price tag. Debt charities say that as high cost loan companies have been pushed out, demand for credit by people in poverty has moved into other areas....Read more here