The demand for payday loans has grown hugely in the last couple of years despite the sector's reputation for sky high interest rates, dubious lending practices and its 'bad debt' connotations.
The number of payday lenders catering to this growing market has increased significantly too, although not all treat their customers with the fairness and respect they should.
Now regulated by the Financial Conduct Authority and investigated by the competition watchdog (the CMA), the payday loan industry has undergone a dramatic transformation.
The FCA has set out strict new rules that include a cap on the cost of payday loans (in effect from January 2015), a limit on the number of times a loan can be rolled over, stringent affordability checks and a ceiling on the amount of interest and fees lenders can charge those in default.
Furthermore, we have been working closely with the CMA to help shape a new accreditation scheme for payday loan comparison websites. Many of the suggestions we put to them are to be implemented, and many of the issues we highlighted are to be addressed.
We will continue to work with the CMA and then, when the FCA confirm the guidelines for an accredited payday loan comparison website, we will aim to meet them, so that we can continue offering a really useful service.
Why do we compare payday loans?
Our whole ethos is centred on giving our users the information they need to make an informed choice about the products, options and courses of action that are best for their individual financial circumstances.
This is why we compare such a huge range of financial products, write so many guides, find so many deals and take such a proactive approach in giving you the answers you need.
Responsibility to our users
We believe it is our responsibility to help users that are looking for a payday loan find the cheapest possible option and borrow from a lender that will treat them fairly, just as with the other financial products we compare.
Comparing the options on a like for like basis is crucial when the difference between the 'cheapest' and most expensive payday loan is thousands of percent.
Similarly, being able to clearly see which lenders have agreed to treat their customers with fairness and respect is all the more important when there are so many unreputable payday lenders offering access to quick cash.
The CMA has identified a greater need for payday loan comparison so we see the work we do in this area as essential.
Ultimately, we feel that if someone is going to take out this type of loan, it is better they are able to make an informed decision rather than simply choose the lender they have seen advertised most or that they have borrowed from before.
An opportunity to educate
One thing to make clear is that we do not recommend payday loans.
We will only ever show you a payday comparison if you have specifically gone looking for this type of financial product. It is for this reason we list payday loans separately from other types of loans.
Furthermore, we do not and will not recommend or 'cross-sell' payday loans from any of our other comparison tables nor suggest you apply for one if you are looking for another type of borrowing.
Instead we do our utmost to make our users aware of the costs, risks and possible repercussions associated with taking out a payday loan, hopefully something that encourages many to search for an alternative option.
We display a clear warning above each of our payday loan comparison tables highlighting the costly nature of these products, and feature a number of guides alongside that help our users evaluate the suitability of payday loans compared to the other options available to them.
An opportunity to improve
We ensure that all payday lenders and brokers we list in our comparison table have the necessary permission from the FCA - this is a legal requirement. We also require that they meet other standards which we set ourselves: before a payday lender or broker can become listed within our comparison they must provide satisfactory answers to over 70 questions about their principles and practices.
We make it clear whether a company listed within our comparison is a direct payday loan lender or a payday loan broker, and if it is the latter that they work solely with regulated payday companies that do not charge an upfront fee.
That is not all though, we are working with a number of payday lenders to improve the clarity of information on their website so that essential information like the Representative APR and example is clearly displayed on the home page and application form, and that information about fees and renewal information is easily accessible.
Our data team are also working with payday lenders and brokers to ensure they are in full compliance with the FCA's incoming rules, and monitoring and implementing any and all feedback from the FCA to ensure that we are giving a fair and representative comparison of this sector.