Payday loan firms face online order over rate details

ONLINE payday lenders will be ordered to publish details of their products on at least one price comparison website under plans by the competition watchdog to make it easier for borrowers to shop around.

The Competition and Markets Authority (CMA) has made the finding following an investigation into the payday lending market, which found that a lack of price competition between lenders has led to higher costs for borrowers.

It found most borrowers do not shop around, partly because of the difficulties in accessing clear information on the cost of borrowing and a lack of awareness of late fees and charges.

The CMA estimates the UK’s 1.8 million payday loan customers could typically be up to £60 a year better off if it was easier for them to shop around.

The watchdog said it believes at least one website, and possibly more, will emerge which people can use to compare the cost of a payday loan. If this does not happen, lenders will be obliged to set up a price comparison website authorised by the Financial Conduct Authority (FCA).

Fraser Sutherland, debt spokesman for Citizens Advice Scotland, said: “Any price comparison site must be able to provide a picture of the whole market and not just refer on to the company willing to pay the biggest commission, as some shockingly bad brokers currently do.”

However, Russell Hamblin-Boone, of the Consumer Finance Association, which represents the Money Shop, Quick Quid and Payday UK among others, said the shortterm lending industry had changed since the CMA investigation began in 2013. He said: “We need to draw a line under the past and recognise the value of short-term lending in a competitive consumer credit market.”