Payday loans company Wonga.com warned yesterday that it could start using debt collection agencies in a bid to collect outstanding payments from those who are unable to keep up with their payments.
Talking to MPs on the Public Accounts Committee, Henry Raine, head of regulatory affairs at Wonga, suggested that the firm was "looking" at employing these new tactics but would begin with a "small trial".
But according to the Daily Mail, several ministers expressed their fears over the plan.
Liberal Democrat Ian Swales said many companies that already use debt collection firms are "very aggressive about trying to get their money back".
Mr Raine insisted that Wonga, which lends up to £1,000 with the cash being transferred in just 15 minutes, would be using a regulated firm to carry out collections.
However, the company came under fire over claims that it encourages consumers into a ever-growing cycle of debt, after it emerged that the average customer borrowed £180 as their first-time loan, but took out three further loans over the course of a year.
Following the committee hearing, Labour MP Stella Creasy said: "The aim is to find the people who are going to have to keep on borrowing because the biggest profits come from people who are going to have to borrow and borrow and borrow."
Have you borrowed from a payday lender? Did it help you or push you into a cycle of debt? Leave your comments below...