Oxford advice charity welcomed a review of high-cost lending

Citizens Advice Oxford has praised the decision of the Financial Conduct Authority (FCA) to review the rules governing a range of high-cost credit options, to ensure these work better for consumers.

Al Bell, Director of Citizens Advice Oxford, said: "When the FCA capped the cost of ‘payday’ loans, the number of people seeking our help with this kind of debt halved.

"However, other sorts of high-cost credit – like doorstep lending or rent-to-buy products – continue to cause problems.

"We are pleased that the FCA has listened to the evidence from ‘Capping High Cost Credit’ and others to bring in this review of the high-cost credit sector.

"Although we’d like The FCA to extend the cost cap to all forms of high-cost credit, this review is a very welcome step in the right direction."

The FCA's review will continue to call for a cap, similar to the one for 'payday' loans, for all high cost credit products.

It will investigate alternatives to rent to own goods, which might include providing goods through social housing schemes and challenging business practices, which may incentivise consumers' long term indebtedness, particularly regarding doorstep loans.

The company will also be looking into increasing the transparency of fees for catalogue sales, where consumers are often hit by high late fees or interest payment fees, and taking action on unarranged overdrafts.