PAYDAY loan and other short-term lenders continue to be charging borrowers Double lent in interest and fees.
Back in January 2023, city watchdog the Financial Conduct Authority (FCA) capped the amount high cost credit firms could charge.
Under its rules, borrowers never need to repay more than double the things they originally borrow.
But 4 years on and an investigation through the Mail on Sunday reveals that many lenders continue to be charging borrowers the maximum – or near to the maximum – allowed.
LoanPig borrowers, for example, will repay an astonishing lb2,000 on the lb1,000 loan removed over 6 months.
While Lendingstream, Sunny, PiggyBank, Mr Lender, and Satsuma all charge near to the maximum lb1,000 allowed on the lb1,000 loan.
The report also found that some lenders, such as Lendingstream and Sunny, don't provide online tools to provide borrowers an indication of just how much they'll pay before they apply.
It may come as complaints about payday loan lenders soared with a whopping 130 per cent in 2023, according to the Financial Ombudsman Service.
The complaints body received nearly 40,000 new complaints about short-term lenders last year Up from 17,000 in 2023.
It told The Mail on Sunday: "From the quantity of complaints we've received it seems the machine is not working."
The Sun has contacted the Financial Ombudsman Service and we'll update this story when we get a response.
StepChange debt charity added there are still difficulties with short term installment loans, despite FCA regulation.
Richard Lane, director of external affairs at StepChange told The sun's rays: “Despite the regulator's interventions within the payday loan market, evidence suggests there are still issues surrounding temporary, high cost credit.
"In 2023, just under one fifth of new StepChange clients reported they'd this kind of loan, with an average debt of lb1,755. Among young adults the proportion is higher.
"The 130 per cent annual rise in complaints recently reported by the Financial Ombudsman service against payday lenders reinforces the fact that, used, you may still find problems."
An FCA spokesperson told us: “Since the FCA took control of regulating credit five years ago, we've used many approaches to ensure consumers are protected and lift standards.
"This has included policy interventions, such as a cap on payday loans, and extensive supervision of firms, that has led to a substantial change in many firms' affordability assessments, along with their forbearance and collections practices.
"As a result of our investigations since 2023, we've secured over lb900million in redress for purchasers. We have recently written to high cost temporary credit firms to remind them regarding their obligations.”
High cost credit trade body, the Consumer Finance Association, says high interest rates reflects the cost of these loans and adds that these providers are providing something that banks can't.
A spokesperson said: “The prices are based upon recovering all costs over a short period as well as reflects the risk a lender is taking that the high-street bank is not prepared to make.
“The average short-term loan is about lb300 repaid over a short time that is a financial lifeline for thousands and thousands of customers."
The Sun has reached out to all of the lenders mentioned in this article and we'll update this story when we obtain a response. During the time of writing, Amigo, CashFloat, LoanPig, Mr Lender, PiggyBank, and Sunny had replied.
Amigo Loans didn't comment, only telling The Sun that like a medium-term rather than short-term lender it shouldn't have been included in the Daily's Mail's research.
A spokesperson for CashFloat says it allows users to repay early without penalty and says it doesn't charge any fees. It adds that it offers lower rates of interest to those who've repaid past loans.
Meanwhile a spokesperson for LoanPig said: "We're not predatory, nor will we disguise the expense involved with providing short term loans to customers who've been given the cold shoulder by their very own Bank.
"At LoanPig.co.uk, we manually assess every loan offered, we make to ensure the customer knows the entire facts from the loan and they are able to afford the repayments."
Mr Lender highlights it lends to fewer than 3 per cent of applicants and says it never lends where any repayment would exceed more than 40 per cent from the borrower's disposable income.
It adds it doesn't charge any fees – only the daily interest.
Dan Ware, leader of PiggyBank, commented: “We reject, on average, over 75 percent of applications we receive. Our company policy would be to provide the best solution for our customers, certainly not the best outcome for that business.
"We allow our customers the chance to repay their loans early with no additional fees, meaning they are able to save money on the amount of interest they pay.”
Scott Greever, md of Elevate Credit, which provides Sunny loans, added: “Sunny was founded in 2013 for those who are unable to get credit from mainstream providers like banks, and was built on principles that have since become mandatory for the sector.
"Sunny has never charged any late repayment fees, we encourage people to repay early to lessen interest and we have a 20 per cent cap on operating profits.
“If a customer is struggling to repay their loan we cause them to become contact us so we can help."
Our Steer clear of the Credit Rip-Off Campaign has also seen the FCA crack down on "exceptionally high" rent-to-own products, as well as make a raft of changes to overdrafts and introduce stricter rules for doorstep lenders.
A whopping 5.4million expensive credit loans were taken out around to June 2023, according to the FCA, up from 4.6million within the same period the year before.
One payday loan firm charging up to 306 percent interest has been targeting hard-up Brits in Facebook groups.