Simon Read: Three months on, payday lenders are still behaving badly

It is now 12 weeks since the Office of Fair Trading (OFT) gave notice to rogue payday lenders that they had to clean up their acts or face instant closure. Since then the regulator has been writing to the country's 50 biggest lenders giving them three months to fall into line.

But the warning seems to have simply encouraged unscrupulous lenders to increase their dodgy actions. Evidence published by charity Citizens Advice this week revealed that some lenders are taking more than is owed, lending to people under 18 and harassing people in debt.

An analysis of 780 cases reported to Citizens Advice's consumer service between 26 November and 13 May – the latter date two months after the OFT issued its warning – revealed several examples of irresponsible lending, including handing cash to people with mental health issues or others who were drunk at the time.

Crucially, the analysis also showed a rise in instances where lenders – or their debt collectors – have chased people for debts when the loan had actually be taken out by someone else using their identity. That shows lenders are failing to adequately check the credentials of borrowers.

Citizens Advice has urged the OFT to take tough and immediate action against payday lenders.

The regulator does seem to have been busy shutting down lenders which break the rules. But it is time to get much tougher with unscrupulous credit companies – before they do more damage.