Payday loans are being presented as a problem again.

Insolvency experts predict that more people who are short of money are going to turn to the High Street shops - and their rivals who advertise on the internet, on TV and in newspapers - for a short-term loan. Some debt charities and consumer groups have said they can lure the unwary into taking on debt that balloons out of control.
But an official study last year said they provided a legitimate, useful, service that helped cover a gap in the market.
How do payday loans work?
Typically someone will borrow a few hundred pounds from a payday loan firm for a short time, to tide them over until they receive their next wage or salary cheque. The borrower will usually offer a post-dated cheque to the lender to cover the eventual repayment of the money borrowed, plus interest. The cash is often emergency borrowing to pay an urgent unexpected bill, or rent or utility bills.
How many people use them?
There are no official figures on how many people use this sort of borrowing.
But Consumer Focus estimated last year that 1.2 million people took out 4.1 million loans in 2009.

In 2008,....Read more here---> BBC News - QA: Payday loans

Government support credit unions as report shows 3.5 million to take out Pay Day Loans

A report from R3, a trade body for insolvency professionals, has found that 45% of the population struggle to make it to pay day each month before running out of cash and that 3.5 million adults are considering taking out a pay day loan in the next six months. Pay day loans provide access to small sums of money until a person’s next pay day but are controversial because of the rate of interest that they charge which can, in some cases, be as much as 4,000% APR. Whilst such borrowing can be useful for immediate one-off emergencies, critics point out that when loans are rolled over – only the interest is paid and the capital left for repayment at a later date – interest costs can quickly spiral out of control.

The report also raises the spectre of ‘zombie debtors’ who can afford to only make interest payments on their borrowings and finds that one in six now finds themselves in this position. Some have argued for a cap to be introduced to the maximum interest rate that can be charged, as is the case in many other countries around the world, and the Government recently committed to looking again at the merits of such a move. Meanwhile the Government cites its work to support credit union development – as an affordable alternative source of credit – as key to its approach to tackling indebtedness and addressing concerns about....Read more here--> CCR Magazine - Government support credit unions as report shows 3.5 million to take out Pay Day Loans

Debt advice groups have raised the alarm over Government supervision of ‘legal loan sharks’ after it emerged that official data on the industry was two years out of date.

The rapid increase in the number of short-term – or payday – lenders offering instant cash at high interest rates has prompted the Government to instigate a review of the sector. However, a report from the Department for Business is not due until next summer. Damon Gibbons, chief executive at the Centre for Responsible Credit, said it was ‘woeful’ that the latest data on the payday loans market at the Office of Fair Trading, the sector watchdog, dates back to 2009.....Read more here--> Payday loans: Debt advice groups call for urgent monitoring of market | This is Money