PAYDAY lenders trapping people with loans when they can not afford to return it.
A study by Citizens Advice found that some companies were still failing to carry out basic checks to make sure borrowers can afford to pay back loans.
A survey of over 400 people who had attempted to use payday loans revealed that one in four had not, or could not remember, being asked questions about their financial situation or ability to repay a loan.
A separate study of Citizens Advice staff and volunteers showed that 27 per cent said inadequate credit checks were the main cause of problems to the people they help.
The research found that fewer problems had been reported since a cap on payday loan interest rates was introduced in January last year.
Citizens Advice helped one 33-year-old man who had been granted a payday loan despite suffering from depression and alcoholism, having no permanent address, being previously declared bankrupt and having only benefit income.
The report finds that half of these borrowers are still getting into difficulty paying back their loans. This increases when looking just at people who did not go through credit checks with 78 per cent getting into difficulty compared to 40 per cent who did have checks.
Those surveyed said it was easy to get a payday loan, using online and phone applications, with few requiring credit checks.
The report also highlighted new methods being used to collect payments from people's accounts. Citizens Advice found a number of cases where a payday lender asked people to share their internet banking details including login and password so a lender could directly access their account and adjust funds without advance permission from the borrower.
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