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Price comparison websites should display payday loan offers in order of price and separate from paid-for adverts, says UK regulator


Price comparison websites could in future have to display payday loan offers in ascending order of price and ensure additional advertising of such offers are differentiated from the main results list, the Financial Conduct Authority (FCA) has said.

The measures are just some of the new standards the FCA has proposed (70page / 613KB PDF) to address concerns raised, and recommendations made, by the UK's main competition authority in relation to competition in the payday loans market.

In February, and following an investigation into the UK's payday lending market, the Competition and Markets Authority (CMA) said that payday lenders must publish clear and comparable information on the potential cost of their products and list those products on a regulated price comparison website (PCW).

The CMA recommended that the FCA review the standards it requires PCWs to abide by when listing high-cost short-term credit (HCSTC) products. It recommended steps be taken to ensure that commercial ties between price comparison websites and payday loan providers do not bias the way payday loan offers are displayed.

The FCA has now said it plans to "require credit brokers acting as PCWs to rank HCSTC products in ascending order of price according to the total amount payable and to ensure that the rankings are competitively neutral and do not give products greater prominence as a result of commercial relationships".

Under the proposals, PCWs would be free to display paid-for advertising of payday loan offers on their sites but those products must be "outside of the ranking tables and not interspersed within them", the FCA has said. The rule will apply to financial promotions such as sponsored links or featured products, it said.

The main list of results "must not be ranked according to any commercial interests and must not be given greater or lesser prominence as a result of those interests" and the FCA's rules on financial promotions, which require those promotions to be clear, fair and not misleading, will apply, it said.

The regulator has also said it wants consumers to be able to search PCWs for payday loan offers "according to the amount and duration of loan that they require" and for PCWs to "disclose on their website the extent of their market coverage by listing the number and names of the firms whose products they compare".

PCWs will also face an obligation to disclose in a prominent way that they are a broker and not a lender.

The FCA said the proposed new standards would apply to "authorised firms which own or operate a website which displays any terms on which high-cost short-term credit products are available from different lenders and in relation to which it holds itself out as a price comparison service or a price service, or in any way describes itself as, or gives the impression that it is, a price comparison website or a price website".

In its paper, which is open to consultation until 28 January 2016, the FCA also confirmed that it does not intend, at this time, to impose new regulatory obligations on payday lenders and other credit providers to engage in real-time data sharing to help companies "adequately assess [the] creditworthiness" of potential customers.

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