The present issue with these companies is not the rate of interest charged...
"...There are
a range of practices we are concerned about. These include poor lending checks, where payday lenders are failing to properly assess whether applicants for a loan have enough disposable income to repay the loan to term in full; another is rollover, where payday lenders are renewing loans without checking whether they will be affordable, even though a failure to pay off the loan as planned is a clear warning sign that a borrower could be experiencing financial difficulties."[1]
"The OFT said irresponsible lending
may have its roots in the way competition works, with lenders competing by emphasising speed and easy access to loans, rather than better interest rates. Lenders may be reluctant to carry out proper affordability assessments in case they lose business to competitors.
The OFT found that only six of the 50 firms it visited could provide documentary evidence that they had assessed consumers' disposable income as part of their affordability checks."[2]
[1]
http://www.guardian.co.uk/money/blog/2013/jun/27/payday-loans-industry-law-unto-itself?INTCMP=SRCH
[2]
http://www.guardian.co.uk/money/2013/mar/06/payday-lenders-reform-ultimatum-oft