Payday lenders to be forced onto price comparison sites

25/02/15 Official investigation recommends payday lenders should encourage greater competition via price comparison

A 20-month study by the Competition and Markets Authority (the CMA) has revealed that most borrowers from payday loan companies do not look for better deals elsewhere.

Simon Polito, chair of the Payday Lending investigation group, said: “We think costs can be driven lower and want to ensure that customers are able to take advantage of price competition to further reduce the cost of their loans.”

The CMA’s findings come as payday lenders are under more pressure than ever before to play fair, with new rules forcing lenders to put strict caps on interest and other charges.

New payday loan rules explained in more detail here

Other recommendations of the CMA report include:

Clearer information about late fees and other charges
Getting websites selling borrowers’ details to payday loan firms to be more up-front
More help for borrowers to avoid damaging their credit records
Improving the data accessible to lenders to see who is and who isn’t a credit risk

“Our actions are aimed at making the market more competitive and further driving down costs for borrowers,” said Mr Polito.