New payday loan rules come into force
New rules have come into effect requiring online payday lenders to publish details of their products on at least one price comparison website in a bid to help borrowers.
Lenders must also have a link to a price comparison site on their website such as to Money.co.uk, Moneyguru, Quiddicompare, Choose Wisely and All the Lenders to see which short-term loan is best for borrowers.
Both online and high street payday lenders must provide existing customers with a summary of their cost of borrowing.
The summary will tell borrowers what the total cost of their most recent loan was, as well as the cumulative cost of their borrowing with that lender over the previous 12 months and how late repayment affected their cost of borrowing.
The orders were implemented on 26 May and follow a 20-month investigation into the payday loan industry by the Competition and Market Authority (CMA), which revealed customers in arrears continued to be treated unfairly.
The payday loan industry has come under scrutiny over the last few years and as a result, lenders now need to meet stringent regulatory requirements on transparency, fees and fairness.
A payday loan cap was also introduced at the end of 2014, which stated that the cost of a payday loan must never exceed twice the amount borrowed and providers could not charge interest of more than 0.8% daily.