Experian’s £275million takeover of Clearscore could be the subject of an in-depth probe by the competition watchdog over concerns that it could increase the cost of credit cards and loans for consumers.
The Competition and Markets Authority (CMA) said today it was concerned that an enlarged free credit score checking company may be less likely to innovate to help people better understand their finances, and reduce competition.
That could potentially lead to consumers paying more for credit cards and loans.
Cost concerns: Experian’s £275m takeover of ClearScore could be the subject of an in-depth probe by the CMA over concerns that it could increase the cost of credit cards and loans
‘Clearscore and Experian are the first and second-largest providers of free credit score checking in the UK,’ the CMA said.
‘Experian is also the largest paid credit score checking provider.
‘Millions of people in the UK use the companies’ services each year to check their credit scores, understand their finances, and choose loans and credit cards online.’
The firms have until next Friday to put forward potential solutions that would alleviate the watchdog’s concerns.
They otherwise risk facing a detailed second round of investigation by the CMA.
Experian shares were down more than 0.6 per cent in early trading.
Experian earlier this month reported an increase in sales for its first quarter, saying it is on track to meet its target for the year.
Total revenue increased nine per cent in the three months to June, helped by an 11 per cent rise in the UK and Ireland and a 13 per cent uplift in North America.
Finance tool: Millions of people in the UK use the companies’ services each year to check their credit scores, understand their finances, and choose loans and credit cards online
However, revenues fell by seven per cent in Latin America at actual exchange rates, but rose by four per cent at constant currency.
Experian said its growth in Brazil had been hit by weaker economic activity, and recent strike action.
Last year, Experian gained customers after a data breach at rival Equifax.
Almost 700,000 UK consumers had personal information accessed in the cyber attack at Equifax, including partial credit card details, phone numbers, and driver’s licence numbers.
Hack attack: Almost 700,000 UK consumers had personal information accessed in the cyber attack at Equifax
Experian said it had experienced a spike in enrolments after the breach. Clearscore has more than six million members in the UK.
Shares in Dublin-based Experian fell 0.8 per cent in morning trading.