Rent-to-Own (RTO) market
highly vulnerable group of consumers were paying too much for household goods. Therefore the FCA would:
- set a total credit cap of 100%, meaning consumers do not pay credit costs that are higher than the price of the product
- introduce a requirement on firms to benchmark base prices (including delivery and installation) against the price charged by 3 mainstream retailers
- prevent firms increasing their prices for associated products such as extended warranties to recoup lost revenue from the price cap
Cash savings market
consumers who stay with the same provider for a long time, receive lower interest rates.
The FCA may decide to suggest a basic savings rate (BSR). It is an interest rate that providers would set themselves but would be required to apply to all easy access cash saving accounts and easy access cash Individual Savings Account after they have been open for a set period, such as a year.
The way commission arrangements are operating may be leading to consumer harm on a potentially significant scale.
The widespread use of commission models which link the broker commission to the customer interest rate, and allow brokers wide discretion to set the interest rate, can lead to conflicts of interest. These conflicts are not being controlled adequately by lenders. This can lead to customers paying significantly more for their motor finance.
The FCA also found that where pre-contract disclosures were not always complete, clear or easy to understand. As a result, consumers may not be given sufficient information and explanation to enable informed decisions.
The FCA is assessing the options for intervening in the motor finance market.
Contracts for Difference (CFD) market
The FCA have seen an increase in the number of UK firms offering CFDs to retail consumers. Firms have increasingly offered CFD products to consumers who may not understand the risks of these products or be capable of bearing potential trading losses. For example, firms have offered ‘bonus’ promotions as well as lower margin requirements to attract less experienced retail consumers.
The new rules are intend to restrict how CFDs and CFD-like options are marketed, distributed and sold to retail consumers. This included requiring firms to stop offering inducements to encourage retail consumers to trade and applying minimum margin requirements (leverage limits).