A British committee has cautioned people about the unscrupulous short-term lenders who aim at low wagers. Britain's Public Accounts Committee (PAC) has stated that such malpractices affect borrowers. They have been responsible for a loss of at least 450 million pounds ($677 million) a year for borrowers.

According to the committee, there has been an increase in cases like these. As banks have curtailed on short-term credit after the 2008 financial crisis, it has been noticed that there has been humungous increase of these so-called payday lenders.

Such initiative was preceded by a review of Britain's consumer lending industry. Presently this industry is worth 176 billion pounds a year.

Margaret Hodge, Committee Chairwoman mentioned that some of the firms have been unscrupulously using predatory methods to target vulnerable people. These techniques involve encouragement of such vulnerable people to take loans from their companies. They are tempted with benefits whole keeping them unaware of certain rate of interests in the policy.

According to the committee, the Office of Fair Trading has not been effective in handling matters like these. Hodge has said that OFT has never fined any of the 72,000 firms in the market and also has never taken back any license.

The committee has urged people to be cautious of such predatory practices.