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OFT: Payday loan companies face competition commission

The Office of Fair Trading (OFT) has referred the payday lending industry to the Competition Commission because of concerns about "deep-rooted problems with the way competition works".

The OFT said it found that customers found it difficult to identify or compare the full cost of payday loans.

It added that there were barriers to switching between lenders when loans were "rolled over".

It was also concerned that competition was based on speed rather than cost.

Simon Gompertz reports.

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