The FCA has published Consultation Paper 15/33: Consumer credit: proposals in response to the CMA’s recommendations on high-cost short-term credit (CP15/33).
CP15/33 follows the Competition and Markets Authority’s (CMA) February 2015 report into payday lending which contained a number of recommendations to the FCA. Following the FCA’s review of those recommendations, it has published CP15/33 to set out its response and various proposals relating to additional standards for price comparison websites (PCWs) which compare high-cost short-term credit (HCSTC) products.
Specifically the proposals require:
- credit brokers acting as PCWs to rank HCSTC products in ascending order of price according to the Total Amount Payable and to ensure that the rankings are competitively neutral and do not give products greater prominence as a result of commercial relationships;
- any additional advertising on PCWs for HCSTC to be outside of the ranking tables and not interspersed within them;
- PCWs comparing HCSTC to enable consumers to search according to the amount and duration of loan that they require; and
- PCWs to disclose on their website the extent of their market coverage by listing the number and names of the firms whose products they compare, and to introduce guidance reminding firms that financial promotions must be clear, fair and not misleading and that they should not make misleading claims regarding market coverage.
The deadline for comments to CP15/33 is 28 January 2016.