The worst of the payday lenders, famed for offering short-term loans at sky-high interest rates, may have faded away, but vulnerable consumers are still being targeted with offers of loans with four-figure APRs.

The medium-term loan market, where money is lent for three to 12 months, is thriving with some lenders charging well over 1,000%, frequently to those on the lowest incomes, or unable to borrow from the traditional banks. These loans appear to work on the same premise as payday loans – a fast online or mobile application process, and money in your account quickly.

Oakam, which advertises heavily on daytime TV, boasts it will lend to those on benefits or with CCJs. New customers can borrow between £200 and £1,750 and repay it over three to 12 months. Returning customers can “borrow up to £5,000 over time”. Oakam’s typical APR is 1,421%.

It was the highest APR that Money found in the sector, though many others top 1,000%. For a £500 loan over six months, PiggyBank has a typical APR of 1,270%, Mr Lender 1,244.2%, Trusted Quid 1,212.95%, Lending Stream 1,325%, and Wonga 1,086%. Yes, Wonga. The notorious payday lender has largely fallen out of the news, but it hasn’t gone away; it’s just offering longer loan terms.

The Financial Conduct Authority (FCA) introduced new rules for short-term lenders in January 2015. Interest rates are capped at 0.8% per day, and customers can never repay more than twice the amount borrowed.

Oakam keeps within the cap, just. Borrowing £500 over six months earns a rate of 1,416.9%. Borrowers repay £946.26, just £54 shy of double the cash borrowed.

Oakam CEO Frederic Nze says the firm’s typical APR is not representative of what it actually charges customers, with higher rates for new customers skewing the figures. He says most customers are charged an “annual interest rate” of between 36.8% and 288%.

“Our rates for new customers begin beneath the FCA’s rate cap for high-cost short-term credit – borrowers cannot be charged more than 0.8% interest per day nor repay more than 100% of the loan principal in interest. While new Oakam customers begin at a higher rate, those using our mobile app have been able to bring down their rates over time by building a digital track record of responsible borrowing behaviour,” he explains.

Debt charity StepChange says 1.4m lower-income households resorted to high-cost credit to meet living costs last year – up from 1.1m in 2016.

It found those using such credit tend to be on low incomes and often in insecure jobs with irregular work patterns. It says this disproportionately affects women, who tend to be in part-time or casual work more than men. Other users of high-cost credit include people with no credit history due to their age or being new to the UK.

The FCA is reviewing other high-cost credit products, with its findings out in May 2018. It is thought to be examining businesses such as BrightHouse, which sells electrical and white goods on a rent-to-own basis, along with doorstep lenders such as Provident.

“We want to see the FCA introduce a cap on rent-to-own and doorstep loan products, just as they already have on payday loans. No one should have to pay back more than double what they borrow over the course of their agreement,” says Gillian Guy, chief executive of Citizens Advice.

The End High Cost Credit Alliance was launched last month, fronted by actor-turned-activist Michael Sheen. It is campaigning against high-interest credit providers and working to find fairer alternatives. It says “fair finance” means the lender is not unfairly targeting consumers with a product they can’t afford.

What lenders to approach?

Moneyline is a social lender in Blackburn. Borrowing £500 over six months at its APR of 208.73% would mean the borrower repays £653.16.

Scotcash is a not-for-profit social enterprise based in Glasgow. A £500 loan repaid over six months at 145.1% APR would repay £618.21.

Street UK, an “ethical loans company” and competitive alternative to doorstep or online lenders. Its typical APR for new customers is 120%.

Another option is a local credit union. Owned and controlled by their members, the credit unions offer both savings and loan products and cannot charge an APR exceeding 42.6%.