Competition Commission sets out issues in home credit inquiry

The UK Competition Commission (CC) has published the issues which it proposes to explore in its inquiry into the supply of home credit. Topics include the scope for substitution between home credit and other credit products, whether regulation of the industry creates any barriers to entry or expansion, and the relationship between agents and customers. The CC is also exploring certain practices adopted by some home credit suppliers. Among the practices being considered are "step-up" loans, where home credit customers initially lend small amounts to new customers because of the risk of default, and "renewals", where customers receive an additional loan within the lifetime of the existing agreement. The CC has not yet reached any conclusion on any issue set out in this statement. Frontier (London) advises Provident Financial.