Although the majority of consumers find home credit loans satisfactory, the Competition Commission (CC) has found that consumers are paying a “high price” for the service.
The CC has launched an inquiry into the home credit market and its initial findings indicate that there may be a lack of sufficient competition in the market, leading to high prices for consumers.
Home credit refers to the door-door loan service which offers small loans to consumers and collects the repayments weekly or fortnightly from the customer’s home.
It is often a convenient loan facility for people on low incomes or who have difficulty getting other forms of credit.
Peter Freeman, acting chairman of the CC, said: “The home credit industry seems to us to provide a service which meets its customer’s requirements. Various factors, however, appear to point towards a lack of effective competition which may mean home credit consumers pay more than they should.”
No conclusions have been reached on the question of effective competition in the home credit market and the CC investigation is ongoing.
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