Payday loan companies must now advertise on price comparison sites

New regulations on payday loan providers have come into force, following an investigation into the sector by the Competition and Markets Authority that concluded in 2015.

Wonga: now required to appear on price comparison sites
Wonga: now required to appear on price comparison sites

Lenders are now required to advertise on at least one price comparison website, and include a prominently displayed link to this on their own site.

The changes are intended to make it easier for borrowers to compare brands and get a clearer understanding of the fees and charges involved, as well as for new entrants to more easily compete with established players.

A price cap on payday loans came into force in January 2015, after a separate investigation by the Financial Conduct Authority.

But industry body the Consumer Finance Association had criticised the cap, saying it had resulted in a 42% fall in loan approvals since 2013, the BBC reports.