Payday loans companies appear to be breaking new industry regulations put in place to protect vulnerable customers, according to a new investigation.
In May, new legislation was introduced which meant that lenders need to advertise at least one price comparison website, in order to help borrowers find the best deal. As a result of the new rules, lenders need to have a “prominent” link to a price comparison website.
However, an investigation by MoneySavingExpert.com found that some payday loans companies are failing to abide by the new rules. In the first week of June, 10 lenders out of 50 investigated did not appear to have a link on their homepage directing customers to a price comparison website.
In addition to this, another 10 firms did not appear to have a “prominent” link displayed on their website.
“It’s important to remember these aren’t merely optional guidelines or nice-to-have recommendations,” said Guy Anker, of MoneySavingExpert.com.
“The CMA must take prompt and decisive action to crack down on those who still aren’t doing what they’re supposed to.”
A spokesperson for the CMA confirmed that it is the legal obligation of all payday loans companies to comply with the latest requirements.
Caroline Wayman, of the FOS, said: “The most striking story this year has been the rise in complaints we’ve seen from people having trouble with credit.
“It’s clear that financial difficulties and financial exclusion remain significant challenges for many people. The important thing is to speak up if you’re struggling.”
