Regulators think we're paying too much for payday loans (gasp)
Have you composed yourself? Well, the news is that payday lenders lack price competition according to the Competition and Markets Authority (CMA). This lack of competition means that you might have £60 a year to your bills.
If you have an APR of 38,979,469%, maybe you wouldn't even slightly care about an extra £60, but still, we're here to bring the news.
So what might happen? Well, CMA are looking at establishing an independent price comparison website. That's the answer, right there, obviously. Payday lenders may be forced to be more transparent about the costs of borrowing.
"If you need to take out a payday loan because money is tight, you certainly shouldn't have to pay more than is necessary," said Simon Polito, chairman of the CMA payday lending investigation group. In some cases, those borrowers paying the extra costs are the ones who can afford it the least."
"This can particularly apply to late payment fees, which can be difficult to predict and which many customers don't anticipate."
"We found that 40% of new online borrowers take out their first loan with a lender via a lead generator, but the way in which these companies earn their money - by selling customer applications to the highest bidder - is often not made clear on their websites and some customers are unaware that these companies are not actually providing the loan."
The competition authority opened their investigation into payday lenders in 2013 after the Office of Fair Trading showed concerns about "deep-rooted problems with the way competition works" in the industry.
Who would've ever thunk it?