News Column

More clarity is needed over payday loans

June 12, 2014

Payday lenders could be forced to spell out the overall cost of defaulting on a loan more clearly up front and an independent price comparison website could be set up to help people shop around after a watchdog found an "absence of price competition".

The Competition and Markets Authority (CMA) suggested the possible remedies after finding that a payday customer could typically save around pound(s)30 to pound(s)60 per year if the market were more competitive.

The CMA's estimates suggest that collectively, UK customers would be pound(s)45 million a year better off if there were better competition. Given that customers take out around six payday loans a year on average, a typical customer could save between pound(s)30 and pound(s)60 a year.

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Source: Herald, The (Scotland)

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