Cheaper overdrafts from high street banks could provide an alternative to high-interest payday loans, according to Citizens Advice Scotland (CAS).
The organisation is calling on banks to become more flexible by providing greater access to fairer short-term credit.
Ahead of a Scottish Government summit on tackling payday lending to be held in Glasgow, Susan McPhee, head of policy and communications for CAS, said: “Payday loans are causing real misery for thousands of people in Scotland, and we have evidence of too many lenders using unscrupulous practices.
“Today’s summit will look at ways that action can be taken at a Scottish Government and local government level to end the proliferation of this problem lending, and CAS are pleased to be part of that process.”
She added: “We are calling on banks to provide clearer, cheaper and fairer overdrafts for their clients so they have an alternative to turning to payday lenders when they need access to short term credit.
“We are also calling on banks to become more flexible by making relatively small, short-term and affordable loans available to all of their clients.
“If banks take their corporate responsibilities seriously, they will listen to these calls.”
CAS reports that it now sees an average 100 cases each week of people facing hardship as a result of taking out a payday loan.