The Financial Conduct Authority has announced its intention to review the biggest payday lenders in the UK in its new capacity as regulator of consumer credit.
Companies such as Wonga and QuickQuid will be visited to verify how they behave towards and collect debts from borrowers.
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"Our new rules mean that anybody taking out a payday loan will be treated much better than before," said Martin Wheatley, FCA chief executive.
"But that’s just part of the story; one in three loans go unpaid or are repaid late, so we will be looking specifically at how firms treat customers struggling with repayments."
The area of payday lenders is being particularly looked at as a result of a large number of complaints made to the Office of Fair Trading (OFT).
Six out of ten complaints made to the OFT concern how debts are collected, and more than one third of all payday loans are repaid late or not at all. That equates to 3.5m loans per year.
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By GlobalDataThe new FCA rules aim to reduce that number but increase the amount of options for borrowers rather than calling in debt collectors.
The investigation will also look at whether firms’ aims are really to focused on the customer, or rather orientated towards profit.
