Research from the lender showed that these “supersize” payday loans, taken out by 8 million Brits, which typically run for 12 months can cost the borrower double the amount they had originally taken out.
James Benamor, founder and chief executive of Amigo Loans, said: “The lending industry seems to go from one set of crooks to another but actually these are big corporate organisations.
“Many of them are owned by the same companies behind payday loans with sky high APRs and hidden charges.
“Pounds to Pocket, for example, is owned by CashEuroNetUK that also runs Quick Quid while recently launched Satsuma is owned by Provident Financial.
“They are essentially trying to rebrand as something different to work around the system and skirt the new regulations.”
The findings revealed people appeared confused about what one-year loans actually were.
A third (29%) were not sure or did not know the difference between a one-year loan and a payday loan and of the eight million Brits who had already taken out what they believed to be a one year loan, 13% admitted they did not know or weren’t sure of the difference.
Benamor said: “It’s a real worry that such a large number of consumers have taken out a supersize payday loan and even more so when you consider the number who have committed to one without actually understanding what they are and how expensive they can be.
“More needs to be done urgently to educate people on these loans and the cheaper and healthier alternatives.”
