24th February 2015
The CMA found after much investigation that consumers are not looking around for the best deals and are just accepting loan products from first lenders they find and not getting the best financial deal. The CMA have also said that lenders need to be transparent showing all costs involved with a detailed summary.
The announcement by the CMA has come after an investigation taking almost two years to rebuild the short term loan market which has been marred with controversy over the last few years. Simon Polito who is in charge of reforming the payday loan market said “Our actions are aimed at making the market more competitive and further driving down costs for borrowers,”
Here is a breakdown of the CMA’s additional proposals –
The recommendations set out by the CMA have come after announcing last year to cap the payday loan industry at not charging more than 0.8% per day on any amount borrowed which came into force in January with no-one having to ever having to back more than double the loan amount borrowed.