Blackpool North and Cleveleys MP Paul Maynard has welcomed plans to cap the amount rent to own stores can charge in interest.
The Financial Conduct Authority is proposing that from April next year customers should pay no more in interest than the cost of the product itself. The change has the potential to save families hundreds of pounds a year.
Mr Maynard, who has long campaigned for reform of the rent-to-own sector and who called a Parliamentary debate on the issue, welcomed the change.
He said: “For some time now I have campaigned for tighter controls over the rent to own sector. Now the Financial Conduct Authority is pressing ahead with proposals for a price cap which will ensure customers pay far less for the goods they buy.
“People often turn to the rent to own sector when they cannot afford to pay for goods up front or have little or no access to credit. As a result they can end up paying hundreds of pounds more than they would otherwise have to and can face eye-watering rates of interest.
“Those who have the least end up paying the most and vulnerable customers, particularly in communities like Blackpool North and Cleveleys, often feel they have no alternative.
“The FCA's new cap, which means people would never pay more in interest than the cost of the product, has the potential to make a real difference.”
Mr Maynard has also encouraged residents to seek alternative options to finance goods.
He said: “There are other options out there, like Blackpool’s Credit Union Clevr Money. I would encourage constituents to consider all their options before buying from a rent to own store.”