SIGN THE PETITION

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CALL ON THE FCA TO CAP INTEREST RATES.

"MORE AND MORE PEOPLE ARE STRUGGLING WITH DEBTS FOR GUARANTOR LOANS AND RENT TO OWN PRODUCTS.

we, the undersigned say, 'IT'S TIME FOR A CAP ON THE COST OF CREDIT.' 

There has been a shift in the high cost credit market as the number of people seeking help for problems with sub-prime products has risen sharply. 

In contrast, the number of people with payday loan debt problems has decreased.

But analysis shows customers of other types of high cost credit are still paying more than double the loan:

  • A £3,000 loan from a guarantor lender paid back over 5 years could cost a total of £7,114 - 137% more than the original loan.

  • A logbook loan of £3,000 paid back over 12 months could cost a total of £6,980 - 133% more than the original loan. Over 3 years, the longest term available, the total cost would be £14,880.

  • A £607 cooker from a rent to own provider to be paid back over a period of 3 years would cost a total of £1,216, just over 100% more than the original loan.  However the original prices of the items are much higher than in other stores.

Poor business practices - like signing people up as guarantors without explaining what this means or charging a much higher price for rent to own goods - are adding further misery.

Since the introduction of a price-cap on payday lending in January 2015, the number of people seeking advice for help with payday loan debts has fallen by more than a half (53%).

The cap means if you take out a payday loan you won’t pay back more than twice the amount you originally borrowed.

The cap has been effective in reducing the number of debt problems caused by payday loans.

We now call on the FCA to extend the cap to cover other types of high cost credit and help to end the misery of debt."

 

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