The UK regulatory body has concluded that the lack of competition in the home credit market from other credit products, new entrants, or among the home credit providers themselves has resulted in customers having to pay higher prices for their loans than would be expected in a competitive market.
Details of the measures to improve the situation have been outlined in the Competition Commission’s (CC) final report. The measures include requiring home credit companies to share data on their existing customers’ payment records, allowing the market to be exposed to greater competition from other lenders and to make it easier for these customers to access other forms of credit.
Other changes to ensure services remain user-friendly include the requirement for companies to produce clearer details on the cost of loans, to make it less complicated for customers to compare prices when shopping around, as well as allowing change in early settlement rebate so that customers who settle loans early receive a better deal.
The measures are scheduled to be in operation by the end of 2007.
