The Competition Commission and payday lending — the cure may be worse than the perceived problem
The rock band Bad Company once said: ‘You never give me my money. You only give me your sympathy.’ Is this the future for consumers of payday loans? Well it could well be if the Competition Commission enquiry leads to a restriction of access to consumer credit for those customers.
In 2010, the Office of Fair Trading (OFT) issued its final report of an extensive and evidence-rich review of high-cost credit. The major finding of that report was that consumers who used high-cost products — including payday loans — had limited options when seeking credit. Mainstream lenders would not provide them with the small loans they required. Thus, absent of any new entry to the high-cost sector, the consumers could only access loans from those who would supply them. The report also found that, generally, standards of customer care in the sector were good. The problems identified were lack of reasoned decision making by consumers and lack of competition between suppliers. The need for these consumers to have access to credit was a clear finding of the OFT.
Now, just four years later, that report seems to have become a forgotten document and we face a Competition Commission enquiry…
If you are registered and logged in to the site, click on the link below to read the rest of the Walker Morris briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Walker Morris
News from The Lawyer
Briefings from Walker Morris
Looking at barriers to the development of effective cross-border e-commerce in the EU.
Which? has lodged a super-complaint in relation to concerns about misleading and unclear pricing practices in the groceries sector.
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
The law school war shows no signs of ending. But we have, perhaps, reached the end of the beginning.