Martin Lewis, creator of consumer help website MoneySavingExpert.com, said the trading watchdog's decision to refer the payday lending industry to the Competition Commission was "shamefully late".
Mr Lewis called for a cap to be placed on the total cost of loans and said lenders should be forced to take more notice of poor credit histories.
He said: "Finally, politicians and regulators are picking up the ball. Yet it's shamefully late. Millions of people have already spent billions of pounds on these often disgustingly expensive debts that lead many people into financial hell.
"The lax regulation and enforcement in the UK means we've been easy pickings for these lenders.
"Couple that with the gradual diminishing of the Social Fund, which was the one route for people on benefits or with little cash to get short-term, interest-free loans, and it's no surprise so many people fall foul".
Personal finance journalist Martin Lewis has secured his own multimillion-pound fortune by agreeing the sale of his website for up to £87 million.
MoneySavingExpert.com was set up in 2003 and has around five million subscribers. It is being bought by price comparison website MoneySupermarket. Lewis is planning to donate £10 million to charity.