Price comparison websites are being accused of taking advantage of customers desperately in need of financial help, by promoting high-cost payday loan companies to them, in return for the lenders paying the comparison websites.
Instead of directing customers (who are often very poor families) to the cheapest deals, it is reported by an industry expert that the price comparison sites are directing them to high-cost payday loans, which earns the price comparison site money.
The boss of Fairmoney.com, Roger Gewolb, revealed he had complained to the Financial Conduct Authority (FCA) about deceitful rivals of his new loan comparison website, arguing that many suggest they are offering the best deal when in reality this may not be the case.
“What some don’t tell you is that their loan listings are ranked by what a lender pays them,” Mr Gewolb said. “These practices are exploiting the most vulnerable consumers, people on low income in desperate need for loans.”
It means lenders can potentially offer a fee to comparison websites in return for being put first on their price comparison tables.
“Price comparison scandals have focused on insurance or energy, not loans. The difference is that if you get a bad insurance deal it might cost you £100, if you get a bad deal on a loan you could lose the roof over your head,” Mr Gewolb continued, who said his website promises to judge best value loans.
