The Competition and Markets Authority (CMA) has published a final report on its market investigation into payday lending.
The CMA, in looking at whether competition is working well in the payday lending sector and what should be done if it is not, has concluded that there are a combination of market features that give rise to the limited responsiveness of customer demand to prices, thereby reducing the pressure for lenders to compete to attract customers by lowering their prices.
In response, the CMA has decided to require, by Order, that online payday lenders publish details of their loans on a price comparison website which is authorised by the FCA. In addition, the CMA will require lenders to provide existing customers with a summary of their cost of borrowing.
The CMA has also made recommendations to the FCA in relation to improving the disclosure of late fees and other additional charges, helping customers shop around without unduly affecting their ability to access credit, improving real-time data sharing and improving the transparency of lead generators.
View Payday lending market investigation – final report, 24 February 2015