Debt charity StepChange says it is seeing more people struggling to cover essential bills such as rent, energy and housing.

It’s keen to highlight the perils of expensive payday loans, especially now that the Financial Conduct Authority (which used to be called the Financial Services Authority) says it will be reviewing how they collect debts.

Misery and hardship are the result of many payday loans – that’s the damning verdict of the Office of Fair Trading, which is particularly worried by what it calls “irresponsible lending”.

Too many people are given loans they can’t afford and when they can’t repay, encouraged to extend them. “This is causing real misery and hardship for a significant number of payday users”, the OFT’s report says.

And these problems aren’t just happening with a few rogue traders. Payday loans, which tend to be around £270, are usually advertised as a one-off, short-term loan, typically costing £25 for every £100 borrowed for 30 days.

But the reality is very different. In fact, almost half of these payday firms’ income comes from loans which last longer and cost more as the amount borrowed and the interest on it rolls over and over. One in three loans is repaid late, or not repaid at all.

More worryingly, according to the OFT, payday loan companies don’t treat borrowers in financial difficulties with any understanding at all. Those in debt are harassed by anything from two to 20 calls a day, often with comments like: “Your problem is not our problem”.

People report being bombarded with emails, texts and phone calls, even when they are at work or with young children.

StepChange says its experience of helping people shows that those who are struggling to deal with payday loans, usually already have other borrowings, including credit card, personal loan and catalogue debts.

Mike O’Connor, chief executive of StepChange Debt Charity said: “Time and time again, people struggling with payday loan debts have been the victims of atrocious treatment by lenders. Too often people are being kicked when they are down. “Clients tell us that they are subjected to aggressive and threatening calls, adding unnecessary stress and anxiety for those people in difficulty. Lenders continue to apply excessive interest and charges to the debts of those in difficulty, which can see relatively small amounts of a few hundred pounds escalate to thousands.”

StepChange suggests taking advice from an independent debt service, such as itself or the Citizens Advice Bureau before taking out payday loans.

And if you’ve already got one, either of those charities can help you manage it to stop it escalating any further out of control

For free help and advice on debt from StepChange, call 0800 138 1111 between 8am and 8pm Monday to Friday and 8am and 4pm on Saturday.