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UK: CMA to reveal revised payday loan investigation

 |  October 8, 2014

The UK’s Competition and Markets Authority is set to announce on Thursday plans to crack down on anticompetitive conduct within the payday loan market.

According to reports, the CMA aims to deter unfair conduct by middlemen that arrange payday loans by amending the terms of reference in its broader investigation into the industry. Those changes will allow the CMA to include the middlemen responsible for arranging a significant portion of payday loans made.

Reports say the alterations are likely part of the CMA’s efforts to increase transparency within the market.

The CMA’s announcement will likely take place within the watchdog’s overall recommendations for improving competition within the payday loan market, an industry that has come under intense scrutiny in recent months.

Last June, the CMA said that through its preliminary probe, the watchdog “found that 40 percent 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 CMA is also reportedly considering the establishment of a third-party price comparison website for the market.

Full content: Sky.com

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