Consumer groups have urged the Office of Fair Trading (OFT) to "come down hard" on the payday loan sector over its debt collection practices.
The use of 'continuous payment authority' or CPAs clauses, is dropping relatives and friends of debt-laden consumers in hot water.
One of the largest players, Wonga.com, has pursued these unsuspecting consumers with the policy. The clause states that the lender can take payments when they are due, and many customers sign up to it immediately when opening an account.
However in some cases the relative's card has been registered to pay outstanding debts via the automated system and the details stored as the primary payment card.
One consumer told The Daily Mail that she had tried to help her sister by using the automated system but then found the company took 26 payments amounting to £632, completely draining her account.
Sarah Brooks, director of financial services at Consumer Focus, said: "In this case the firm is claiming this was a simple mistake - but we know that continuous payment authorities (CPAs) have been the cause of much consumer discontent.
"The problem is that firms have sometimes used CPAs as a substitute for good credit checks. In some cases they wrongly use this mechanism even when the consumer cannot afford to pay. This can cause huge problems for consumers with debt problems who are then not left with enough money to pay essential bills such as heating and food.
"Consumers must be made aware they have the right to cancel CPAs with immediate effect, despite what the lender may be telling them...The OFT must come down harder on companies that don't follow its rules."
The Office of Fair Trading (OFT) has investigated the high-cost credit sector, since 1.2m people now use the service for quick fix loans. The consumer watchdog has raised concerns on its business practices in particular transparency and debt management and has graded the sector a "high risk activity".
An OFT spokesman said: "This area is one of our concerns which we have raised in our submission to the House of Commons Select Committee."
A spokesman for Wonga.com said: "The incident with the Mail (and another with BBC Moneywise) were both rare cases and we apologised and refunded very quickly. We are extremely transparent about how our service works, how much it costs and how we collect the money. Customers receive email and text reminders before the due date, which they have chosen, and we receive a lot of positive comments about that. If someone is having problems we have a professional collections team they can contact at any time to discuss the situation."