The Competition and Markets Authority has stated that payday lenders must make their products available on at least one price comparison website, to foster a better deal for consumers.
The CMA envisages regulated price comparison sites, which will provide comparable information on all potential loan costs, in particular the total amount payable, and have the ability for customers to compare different loans by searching easily on the most relevant features such as loan amount and duration.
The Financial Conduct Authority currently has a role in regulating price comparison websites, which are covered by the regime for credit brokers.
A spokesman for the CMA told IBTimesUK: "We are hoping existing price comparison websites will start to include payday lenders. We have been in talks with quite a few of the well known ones - they are not all mad keen - but there is at least one that has said they will include them."
The CMA spokesman said the incorporation into price comparison websites of the required information on payday lenders, would realistically take until next year.
Later this spring, the FCA assumes the power to enforce breaches of competition legislation and refer markets to the Competition and Markets Authority.
The CMA has also made recommendations to the FCA to take steps to:
- improve the disclosure of late fees and other additional charges
- help customers to shop around without unduly affecting their ability to access credit
- improve real-time data sharing between lenders and credit reference agencies
- ensure that lead generators – websites which sell potential borrowers' details to lenders and through which 40% of first-time online borrowers access their loans – explain how they operate much more clearly to customers