The Competition and Market Authority has said payday loans customers are "paying the price" for the lack of competition in the sector.
Simon Polito, chairman of the Payday Lending Investigation Group, said:
Short-term loans like these meet a very clear need for around 1.8 million customers a year.
This level of demand isn’t going to go away so it’s important to ensure that this market works better for customers.
Our focus is now on taking practical steps that will make a real difference to borrowers so we now want to hear from all those involved on how best we can achieve this.