Media playback is unsupported on your device Media caption Mark Todd and his partner Sheila Lund are £3,000 in debt after taking out payday loans

Consumer group Which? has called on the government to introduce tighter regulation, ahead of a summit on so-called payday lenders.

These companies offer short-term loans at high interest rates but are accused of leading people into more debt.

The industry, worth £2bn, was referred to the Competition Commission by the Office of Fair Trading last Thursday.

The summit will bring together payday lenders, regulators, charities and ministers.

Consumer Affairs Minister Jo Swinson will host Monday's meeting.

The lenders say they are already changing their practices. A new regulator, the Financial Conduct Authority, will oversee payday lenders from next April.

Which? executive director Richard Lloyd said the area of payday loans was a "toxic market".

Its survey suggested that about one million households use payday lenders every month.

Mr Lloyd said: "We want new rules banning excessive charges, a restriction on the number of times a payday loan can roll over and clearer advertising to help people struggling with spiralling debt."

Consumer groups say some firms charge excessive rates and make it difficult to compare the full cost of loans. The Citizens Advice charity has accused the payday loan sector of being "out of control".

'Excessive charges'

The OFT said it found that customers found it difficult to identify or compare the full cost of payday loans.

It added that there were barriers to switching between lenders when loans were rolled over.

The OFT said it was also concerned that competition was based on speed rather than cost.

It said some of the business models of companies caused concern because they were "predicated on making loans which are unaffordable, leading to borrowers paying far more than expected through rollovers, additional interest and other charges".

Lenders appeared to make 50% of their revenues from such practices, it added.

The OFT questioned the use of phrases by some companies such as "instant cash", "loan guaranteed" and "no questions asked".

Payday loans, used by about two million people in the UK, are designed as short-term access to cash at relatively high cost until the loanee is next paid.

However, in many cases, individuals have struggled to repay and the compounded interest of loan after loan has left them in a spiral of debt.

The body which represents payday lenders, the Consumer Finance Association, said it welcomed well-designed regulation but was unhappy about the scrutiny that the industry had received.