Experian risks in-depth probe by competition watchdog over ClearScore takeover
The Competition and Markets Authority is concerned about the impact on consumers.
The competition watchdog has threatened to launch an in-depth investigation into Experian’s £275 million takeover of ClearScore over concerns that it could lead to consumers paying more for credit cards and loans.
The Competition and Markets Authority (CMA) said on Friday that it was concerned that an enlarged company may be less likely to innovate to help people better understand their finances.
That could potentially lead to consumers paying more for credit cards and loans.
“ClearScore and Experian are the first and second-largest providers of free credit score checking in the UK,” the CMA explained.
“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 now have until July 27 to put forward potential solutions that would alleviate the watchdog’s concerns.
They otherwise risk facing an in-depth investigation by the CMA.
Experian shares were down more than 0.6% 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 rose 9% in the three months to June, helped by an 11% rise in the UK and Ireland and a 13% increase in North America.
Revenues fell by 7% in Latin America at actual exchange rates, and rose by 4% 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 following 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.
Experian said it had experienced a spike in enrolments after the breach.