No Competition - OFT verdict on home credit industry
14th September 2004

The OFT has responded to the National Consumer Council Super-Complaint concerning the home credit - door to door lending - industry and is looking to recommend a referral to the Competition Commission.

Citing the 49% market share of Provident Financial, and the way in which the loans are "rolled over" to prevent borrowers from switching to cheaper alternatives, the OFT commented that "Overall, it appears to the OFT that competition among suppliers of HC is restricted. Lenders seem to have limited incentive to compete on price or attempt to win business by taking over other lenders' loans."

Debt on our Doorstep supports this view of the home credit market, and considers that restricted price competition supports the need for price capping - something that the Government unfortunately ruled out in advance of the OFT's findings.

The OFT are currently consulting on its proposal to make a referral to the Competition Commission until the middle of October. Further details can be found on the OFT website