Massive fees and charges are ramping up the overall cost of payday loans, trebling debts in a matter of weeks.
Well known for their high interest rates, reaching up to 14,348%, payday loans have grown in popularity over recent years by providing emergency financial crutches to thousands of people. It is estimated that three million people used payday lenders over the past year alone.
Whilst interest rates for these controversial loans must be clearly advertised by law, the large charges for missing the loan's payback date listed in the small print can often be overlooked.
According to a report in the Daily Mail, one in five payday loan borrowers have fallen foul of hefty late payment charges.
Una Farrell, spokesperson for the Consumer Credit Counselling Association, said: "People are being lured into a false sense of security by many payday lenders.
"Firms need to be more upfront about fees and give detailed examples of the true cost of rolling over loans on their websites."
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