Wednesday, May 24, 2006
Category:
Finance News
Home credit customers have been overcharged for their loans by around £100 million in the last five years.
According to a provisional report from the Competition Commission (CC), a shortage of competition in the market means that borrowers are being charged on average £9 for every £100 borrowed.
It was found that six large lenders represent around 90 per cent of the home credit market, with one accounting for over half.
Home credit lenders offer small unsecured loans through agents who call at customer's homes.
"Customers value home credit because it suits their needs very well but the fact is that they are paying too much for it, because of the lack of competitive pressure in the market," commented Peter Freeman, chairman of CC.
The final report from CC on this issue is to be published in the summer, while the commission intends to begin investigating methods for increasing competition in the market.
