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Payday loans must now be on price comparison websites


The Competition and Markets Authority (CMA) has announced new regulations and recommendations for payday loan companies, including the fact that payday loans now must make their product details available on at least one price comparison site.

The CMA found that most borrowers do not shop around for loans, and believe a price comparison website would encourage further competition in the market, which is turn will push down prices for consumers. Also, payday loan companies must now give each customer a breakdown of the total cost of their loan, including any charges or interest.

Details of payday loans do not currently appear on price comparison websites, but the CMA is in discussions with existing websites to see if that is a service they can provide.

The CMA has also recommended that there should be:
• More transparency on late fees and charges
• Measures to help borrowers protect their credit files
• More explanation to consumers that some websites may sell potential borrowers details
• A real time data sharing service to help lenders assess risk more accurately

New regulations brought in last year made sure payday loans are capped at 0.8% interest per day of the amount borrowed, and no-one will have to pay back more than twice the amount they borrowed.

Simon Polito, chair of the CMA's Payday Lending investigation group said:
"Our actions are aimed at making the market more competitive and further driving down costs for borrowers"

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