Competition watchdog demands comparison site for payday loans

PAYDAY borrowers would be treated fairly only when they could properly compare loans, the Competition and Markets Authority said yesterday.

The sector already displays a range of prices and varied quality of service, the CMA’s probe found, but it said competition was not working properly at the moment.

Without such a move, the average borrower would end up paying an extra £10 per loan, amounting to extra profits of £45m for the sector, the regulator estimated yesterday.

Although the CMA has outlined the need for a price comparison website, the watchdog admits there has been little discussion on how it may be implemented, or how long the process could take.

Sources close to the authority have indicated that bids for the researching of the website will be invited as early as this month.

Payday loan group Cash Converters have said they “welcome the review and agree that competition is essential in order to drive out poor practice and successfully protect the customer”.