LONDON, June 11 Britain's competition watchdog
said payday loan customers may be paying too much for their
loans due to a lack of price competition in the industry.
The Competition and Markets Authority (CMA) said on
Wednesday it will look at ways to increase price competition,
including the establishment of an independent price comparison
website and clearer upfront disclosure of borrowing costs if a
loan is not paid back in full and on time.
Britain's financial regulator is already forcing the
industry, which includes Wonga, QuickQuid, Lending Stream and
many other lenders who give short-term loans, to make changes to
better protect consumers.
The CMA said its provisional findings showed the absence
of price competition could be adding 5 to 10 pounds to the
average cost of a payday loan, relative to a typical loan of 260
pounds taken out for just over three weeks.
It said as customers take out around six loans a year on
average, a typical customer could save between 30 and 60 pounds
per year if the market were more competitive.
(Reporting by Steve Slater, editing by Louise Heavens)