CMA targets pay day lenders and comparison websites

A neighbour recently asked me (starting his question with the dreaded phrase "You're an economist…") what was all this fuss about payday lenders? Surely they are providing a valuable service to people who were fully aware of the eventual cost of their transaction? This can't be an example of market failure? He then went into some long-winded moan than I'm sure included the phrase 'Nanny state' at some point.

Today, I'll be directing him to the Competition and Markets Authority's website which has published its report and recommendations into the payday loan market (that'll teach him for calling me an economist). I'm not sure it will alter his belief in an over-regulatory interference of the government but it will detail why the market has flaws that some would argue need addressing.