The number of people seeking help from debt charity StepChange over payday loans rose by a staggering 82% last year, new figures from the charity have revealed.
In 2013, 66,557 people contacted the charity over their worries regarding payday loan debt, up from 36,413 in 2012.
In total the charity dealt with 202,333 payday loan debts last year, up from 109,302 the year before, and handled £110 million worth of loan debt, more than double the amount it did in 2012 (£60 million).
The payday loan industry has come in for heavy criticism in recent years with companies accused of charging excessive interest rates, in some cases as high as 5,000%. In April, the Financial Conduct Authority (FCA) takes regulatory responsibility for the sector and will decide on a level to cap the cost companies can charge in a bid to tackle the problem.
StepChange said the average payday loan debt of a person seeking help is £1,467, more than the average client's income of £1,381. Moreover, nearly 14,000 people (13,800) who sought help in 2013 had taken out five or more payday loans in order to cover their costs.
It is also seeing numerous cases in which people's debt is increased by excessive rates, with one man seeing his original debt of just £200 mushrooming to £1,851 in three months.
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The FCA has said it will limit the amount of loan roll-overs borrowers can make to two and restrict the number of times lenders can attempt to use a continuous payment authority (CPA) - where money is automatically debited from a customer's account – to two.
But StepChange said it believes rollovers should be limited to one as it is a clear sign the person is in financial difficulty and that as well as capping the amount of interest payable on the loans, lenders should also be unable to add any additional charges for any unsuccessful CPA attempts.
Worryingly, the charity also found the majority of people seeking help had other debt concerns. Nearly two thirds (62%) of clients had overdraft debt, 60% had credit card debt, 45% had personal loan debt, and 39% had catalogue debt.
Mike O'Connor, chief executive of StepChange, said: "The widespread harm and misery caused by payday loans continue unabated. The industry has failed to address the problems causing untold misery and damage to financially vulnerable consumers across the UK."
"We hope the FCA's proposals will address some of the areas of consumer detriment, but on issues such as affordability checking, rollover and repeat borrowing, there is an urgent need for even more radical reform."