CC: Increased need for doorstep competition

TUESDAY, AUGUST 15, 2006

The Competition Commission (CC) has proposed a need for increased competition amongst home credit providers.

It has made the plea in order to help lower the cost of borrowing for consumers and the plans put forward by the CC include making sure doorstep lenders share data on payment records.

Also proposed is the necessity for doorstep lenders to give better information on the total cost of borrowing.

Doorstep lending involves the borrowing of small cash amounts with interest paid weekly – it is usually applicable to those with poor credit ratings.

The CC's proposals follow an investigation earlier in 2006 which showed that borrowers who utilised doorstep lending have been overcharged in the region of £100 million.

A secured loan from a company such as NEMO often provides a much better rate than is available from doorstep lenders.