Cap rent-to-own lending like payday loans, MPs told.

Charities have called for rent-to-own lending and other forms of high interest credit to have their charges capped.

The demand came as lenders and debt management charities were quizzed by MPs on the Treasury select committee as part of an investigation into household finances.

Rent-to-own forms of borrowing, where a consumer might pay a weekly amount over time, in order to pay for a product were a serious problem for “very vulnerable” people, the charities warned.

These forms of lending are used by half a million consumers each year, Mr Andrew said. Rent-to-own often led the poorest customers to pay a much high premium for items, such as washing machines. A low weekly payment often masked the fact that it would be cheaper if a consumer could afford to buy an item upfront. This price inflation was in-part due to bundling in unnecessary warranties on products.

By Anna Isaac.

Full story at Yahoo News.