The Consumer Finance Association has announced plans to develop a price comparison website for payday loan customers and expand the industry’s data-sharing capabilities.Speaking exclusively to Credit Today John Lamidey, chief executive of the Association (CFA), said the data-sharing side of payday lending had expanded massively, with four new players entering that specific market.
Following this expansion, Lamidey said the industry was now working to harvest real-time data on customers and combine it with mainstream data provided by the “big three” credit reference agencies, to give payday lenders a better picture of their customers.
This, he said, was necessary as the short-term nature of payday loans meant that mainstream data, which is often updated monthly, was too out of date to provide an accurate enough profile of a payday loan customer.
He said: “The whole credit reference agency industry grew up on mainstream loans so the reporting is only on a monthly basis, which is no good if you are only lending for a month.
“We are working with specialists to improve the quality of the product so that we can find out more about our customer, but we will never be in the situation, as with mainstream lenders, that we know everything but we are getting much better.”
At the same time he said the CFA was working on developing a price comparison website for payday loan customers, in response to concerns voiced among politicians and debt charities that consumers risked falling into cycles of debt if they used payday loans in the wrong way.
To this end Lamidey also proposed widening the scope of the payday forum – in which stakeholders meet to debate the industry – to include lawyers and other credit reference agencies.
“What we would like to do is expand the remit of the payday lending code,” he added. “We would like to deal with any issues to do with payday and open the membership of the forum to other parties.”