MSE News: Payday lenders shut up shop after OFT probe

jamesd

jaxdia wrote: »

I think you're forgetting that only the payday lenders who felt they couldn't prove their practices were above board have shut up shop. This is good for us.

There are costs to a business in preparing proof that it's doing or not doing things. Those costs are likely to be most significant for the smaller firms. As the story notes, the biggest players remain in the market and those are the ones who are most able to deal with large transient added costs.

As Moll59 effectively noted in the post after yours, a reduction in competition that favours big players by making costs too high for smaller ones is not something that is good for consumers.

The firms that left may simply not have had the funding to be able to pay the one-off costs of dealing with the Competition Commission or Office of Fair Trading investigations, so ended up forced out of business instead. That'd be a pretty big failure given that the job of the Competition Commission is to encourage competition, not squelch it.

Here's a link to the OFT update on which this story is probably based.

rizla_king

jaxdia wrote: »

I think you're forgetting that only the payday lenders who felt they couldn't prove their practices were above board have shut up shop.

Make room for some that maybe can.