As Which? reports some payday loan companies, which lend money to people on a short-term basis at high interest rates, to the Office of Fair Trading, new research finds very low awareness of the expanding market among UK consumers.
According to the latest research by PRWeek/OnePoll, 63 per cent of those asked were unable to name the payday loan company they thought had the best reputation. Of those who could specify a company, 13 per cent said Wonga.com and ten per cent said Cash Converters.
Of the 2,000 survey respondents, 59 per cent said payday loan companies were unethical. When asked to select words they most associated with payday loan companies, exploitative came out top with 73 per cent, followed by predatory (49 per cent) and greedy (45 per cent). Only three per cent said ethical and six per cent said necessary.
But there was a large amount of sympathy for those who used payday loan companies. More than half said they were victims of a tough economy and 50 per cent said they were desperate, but 53 per cent said those using payday loans were poor at managing their own money.
The majority of people - 73 per cent - supported MP Stella Creasy's proposal for a cap on the cost of credit with payday loan companies.
But nearly three-quarters of people (73 per cent) said the Government was not doing enough to help ordinary people cope with the high cost of living.
Survey of 2,000 members of the public conducted by global research agency OnePoll.
HOW I SEE IT - TONY LANGHAM, CHIEF EXECUTIVE, LANSONS COMMUNICATIONS
Alternative financiers stepping into the space vacated by big banks is one of the hottest financial stories. Pawnbrokers are growing, leasing and factoring is on the rise and fastest growing of all are payday loan firms. As a nationally representative survey, this suggests the market is more than six million people - more than three million have used payday loans and three million say they would consider them.
The public at large does not like the industry - 59 per cent say it's not ethical and 73 per cent support the campaign championed by MP Stella Creasy to cap interest rates. At present this remains unlikely.
Britain's regulators have normally judged caps as anti-competitive and fair underwriting of loans - where those who are highest risk pay the highest rates - is on the face of it fair. However, when businesses like Wonga.com look to cash in on their success, we will know what level of profit margin they make - and public policy judgement over whether they are producer or predator will follow.
92% of respondents who had not used a payday loan said they would not consider using one in future
Lack of state help
73% said the Government was not doing enough to help ordinary people cope with the high cost of living
50% said people who needed payday loans were desperate