Payday lenders accused of being 'out of control'

Debt charities have accused lenders of being "out of control", by granting loans to people who cannot afford to repay them:

• More than 7,000 people who contacted debt charity StepChange last year had five or more payday loans - rocketing from just over 700 in 2009
• Charities have also reported seeing cases where people were drunk when they took out the loan or had mental health issues

• They have raised concerns that penalty fees and charges piled on top of interest can also mean that the cost of the debt balloons out of proportion with the original loan for a struggling borrower

• In one case seen by StepChange, a client faced a total debt of £1,830 for an initial loan of £120