LONDON (Reuters) – Britain’s short-term lenders have been ordered to publish details of their loans on at least one price comparison site as regulators seek to improve transparency on prices and encourage customers to shop around.
The competition watchdog said online ‘payday’ lenders “should provide customers with clear, objective and comparable information on all potential loan costs”.
It adds to the introduction of a price cap on lenders at the start of this year by the industry regulator, the Financial Conduct Authority. Loans have been capped at 0.8 per cent a day, equating to an annual rate limit of 292 per cent.
Lenders such as Wonga had previous charged rates equivalent to more than 5,000 per cent annually.
The Competition and Markets Authority’s final report on the industry on Tuesday endorsed its previous proposals to improve transparency after a 20-month investigation.
The study found a lack of price competition between lenders has led to higher costs for borrowers.
The CMA said it expects one or more commercial price comparison site to emerge, but if that does not happen lenders will be obliged to set one up that is authorised by the FCA.