Payday Lenders Forced to Feature Loan Deals on Price Comparison Sites
February 24, 2015
Payday lenders across the UK will soon be obliged to feature details of their loan offerings on at least one price comparison site in the interests of consumer protection.
The independent Competition and Markets Authority (CMA) has ruled that having payday loans feature on price comparison websites will help give users of these financial facilities a much clearer understanding of what the associated deals entail.
CMA investigators have been looking at ways to improve practices within the UK’s payday loan markets for almost two years and have the power to introduce new rules with the backing of the Financial Conduct Authority (FCA).
Explaining its conclusions on the subject, the CMA said it has recommended to the FCA that price comparison websites should “provide customers with clear, objective and comparable information on all potential loan costs”.
The authority is also keen to ensure that potential borrowers should be able to compare different loan deals against one another with a particular focus on “the most relevant features such as loan amount and duration”.
The CMA is currently assuming that existing price comparison websites will be willing and able to deliver their services in the context of payday loan deals but, if this is not the case, then lenders themselves will need to set up websites for that purpose and have them authorised by the FCA.
The FCA is also being urged to do more to force payday lenders to disclose their policies on late fees and additional charges, and to bring more transparency to the ways in which the industry’s “lead generators” operate.
“Even where borrowers do shop around at present, it is difficult for them to compare prices between short-term loans given the differences between products and the limited usefulness of the APR in making comparisons,” said Simon Polito Chair of the CMA’s Payday Lending Investigation Group.
“To help them, we are requiring lenders to be listed on price comparison websites authorised by the FCA and have recommended to the FCA that these websites should carry all the information customers need to compare easily the total cost of different lenders’ loans.”
Earlier this year, the FCA introduced new rules that effectively set limits on the amounts of money payday lenders can charge their customers as interest and fees in relation to unpaid loans. The CMA has said its aim is to support these efforts by enhancing competition throughout the industry.
If you’re worried that the council might take action against you for non-payment of council tax, entering into a Scottish trust deed can be a beneficial step. It stops legal action by all creditors included in the arrangement, and provides a ‘safe haven’ from which to regain control of your finances. As council tax arrears […]
A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer. Even if you can secure borrowing, lenders are only likely to offer unfavourable […]
If you owe a debt of £5,000 or less, your creditor may send you a Simple Procedure Notice of Claim. This is a relatively new procedure that was brought in by the Scottish government and commenced on 28th November 2016 – their intention being to make it easier to resolve debt disputes. So if you’ve […]
A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy. Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness […]
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to […]
If you’re struggling to pay your unsecured debts, a debt payment programme could help you to regain control of the situation, and become financially stable again. Debt payment programmes are a fundamental part of the Debt Arrangement Scheme (DAS) in Scotland, and allow you to repay over a longer period of time. These programmes involve […]