High Street banks must take payday lenders on

Banks should accept some responsibility for the growth of the payday loan market, and should offer an inventive, low-interest and responsible so lution to the need for short-term credit, a charity chief has demanded.

Citizens Advice chief executive Gillian Guy said yesterday: "Banks have turned their backs on some of the poorest people by shutting them out of mainstream banking, leaving them at the mercy of predatory payday lenders.

"They can step up to the plate by offering responsible short-term loans that can be spread across a person's bank account so they can pay an urgent bill and still feed their family without being sent into a spiral of debt."

In February, the charity reported four payday lenders to the Office of Fair Trading, and called for them to be banned from trading. The OFT this week closed two rogue lenders. It shut them down after it emerged that one of the people behind them is a convicted fraudster.

Brighton-based Loansdirect2u.com charged 2,514 per cent APR but also coined it in with a range of outrageous fees on top, including an upfront £3.99 charge, which it kept if loans were turned down.

It – and B2B International UK – were closed after it came to light that Neil Evans, an associate of both firms, had been convicted for violence and fraud.

The OFT's David Fisher said: "We will protect consumers against anyone who fails to disclose relevant information about criminal convictions."

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