To ask the Chancellor of the Exchequer
(1) what estimate his Department has made of the share of the payday lending market covered by (a) Experian, (b) Equifax, (c) CallCredit (d) CoreLogic and (e) FactorTrust;
(2) what assessment his Department has made of the effect on credit scores of increased data sharing by payday lenders;
(3) if he will take steps to prohibit credit reference agencies from selling payday customer details to marketing agencies and lead generators;
(4) if he will instruct the Financial Conduct Authority to require credit reference agencies to report their data to the Authority for enforcement purposes.
The Government has made clear to lenders that credit data sharing is key to proper affordability assessments and promoting a competitive market, and more progress on recording and using payday lending data in real time is vital to addressing problems around multiple loans.
Having access to comprehensive real-time data about their customers’ outstanding commitments may help avoid consumers taking out a loan which they cannot afford to repay.
The FCA has already made clear to payday lenders and credit reference agencies (CRAs) in its policy statement, published in February, that they must identify and remove any data sharing blockages involving payday lenders as a matter of urgency.
In its consultation on the cap on the cost of payday loans, published in July, the FCA stated it expects to see more than 90% of current market participants - by market share and volume of loans-participating in real-time market-wide data sharing by November 2014, and more than 90% of loans being reported in real time. In order to improve the coverage of real-time databases, firms will also need to share data with more than one CRA.
The FCA stated that it will request information from firms and CRAs in order to get an accurate picture of whether the standards it has proposed have been met by November. If the FCA does not see sufficient progress by November or CRA coverage does not improve, it will consult on the introduction of data sharing requirements. It has also placed a requirement on firms to provide product sales data on high-cost short-term credit agreements every three months once they are authorised.
Credit reference agencies must ensure that that their use of personal data is compliant with the Data Protection Act 1998 (DPA). The Information Commissioner’s Office is an independent UK supervisory authority that oversees and enforces compliance with the DPA.