Payday loan firms not competitive, says CMA

An investigation by the Competition and Markets Authority (CMA) has found that lack of competition could be adding £30 to £60 a year to customers’ bills.

The regulator looks to change the situation, by establishing an independent price comparison website.

Lenders may also have to give clearer disclosure of borrowing costs.

Simon Polito, chairman of the CMA payday lending investigation group said “if you need to take out a payday loan because money is tight, you certainly shouldn’t have to pay more than is necessary,”

The average income of payday lending customers is similar to the overall population, but access to other credit options is often limited, he said.

Mr Polito also said “in some cases, those borrowers paying the extra costs are the ones who can afford it the least.”