Former council tenants in Preston will no longer be able to pay their rent at the town hall and instead face paying it at cigarette shops.
It comes after Preston City Council endorsed notices were placed in the town hall informing tenants that from November 28 there would be changes.
Tenants were given a choice of Supercigs, St John's Centre, the Post Office, Theatre Street, Abid Foodstores, Fishergate Hill, and Best One, Friargate.
They will be required to use a new allpay swipe card to pay their rent over the counter at any of the outlets listed.
The move has been slammed by independent councillor, Terry Cartwright, who said the move was degrading for tenants of the 6,000 properties in Preston and beggared belief.
"We are talking about an £80million organisation using a substandard payment system," said Coun Cartwright.
He said the initiative showed a disregard for people's privacy making them pay their rent in a convenience store.
The move comes as the housing association took over the reins of the properties, on Tuesday, from Preston City Council.
A spokesman from the housing association apologised to tenants who preferred to continue paying their rent at the town hall and said the not-for-profit organisation was not promoting any of the outlets selected as an allpay point.
"Tenants who have an allpay card will be able to pay their rent at any post office and any shop or supermarket displaying the pay point or pay zone sign," said a spokesman.
"We have chosen this method because it provides far more outlets for tenants to be able to pay their rent than other methods and there are better standards of service.
"An independent assessment of payment services carried out by the Northern Housing Consortium recommended the allpay method to housing associations.
"In using this method, the Community Gateway Association is in no way promoting any of the outlets provided by 'allpay'. The Community Gateway Association is very sorry that tenants who used to pay their rent in Preston Town Hall have felt inconvenienced by no longer being able to."
The handover of the council stock is supported by £48million from Government funds and the new owners have pledged to spend £80million on property improvements and neighbourhood regeneration over the next five years.
Its business plan includes investing nearly £500,000 each year to develop neighbourhood skills to allow more tenants to get involved in shaping the future of their homes and communities.
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