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Which? claims some payday loan fees are 'unlawful'

13 January 2014 Last updated at 13:59 GMT

Which? says payday lenders are charging unlawfully high fees when borrowers fail to repay a loan.

The consumer body found ten of the 17 leading payday lenders charged default fees of £20 or more.

Richard Lloyd, Executive Director of Which? told BBC Radio 5 live's Breakfast: "It's these high charges that are one the biggest factors that tip borrowers into a spiral of debt."

However the Consumer Finance Association, which represents the industry, said its members leant money responsibly and were committed to help those in financial difficulty.

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