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Even when a person has been rejected by one payday lender for a loan, they are just turning to another in order to get the money they need. This is becoming an increasing problem as it shows that the rules from Financial Conduct Authority on all lenders are still not tight enough, and it also indicates a still increasing demand from families for money, even it it comes at a high interest rate.

YouGov surveyed thousands of people, and of the ones that responded, over 40 percent of them said that if they were turned down by one lender, they just turned to another instead. So people are still taking on debt rather than trying to find some type of alternative or addressing the cause of their hardship.

Staff from Financial Conduct Authority think what may be occurring is that the rules on some lenders are strict and are being enforced, but there still may be some other high priced payday companies that are falling under the radar. Currently, over 500 companies are under the remit of the FCA. However, the FCA is concerned with the results of this survey from YouGov, as it may mean enough is not being done when it comes to the affordability checks and that some companies may still be skirting the regulations.

Since the rules and application process will differ by company, what may happen is a person can be declined from one lender. However, another company may approve the same request. The big reason this can occur is because of the dollar amount that someone wants to borrow, the interest rate in question, and how the lender will also review credit risk, among other factors.

The FCA wants this process improved to ensure an affordability check is done on each application as well, and this is one of the rules the regulators need to better enforce. So each lender will still make their own decision, based on factors they decide, but affordability needs to be ensured. Right now this may not be always occurring, and this is what makes it possible for a customer to be declined from one company to be awarded a loan from another.

Studies show that people who turn to a payday lender Such as Cash Converters or QuickQuid may use this source of borrowing up to six times per year, and this includes those that have had their application denied. Polls have found that over 40pc of borrowers regret taking on money this way, and wish they looked for other sources of funding.

What people can be doing instead of taking on high priced debt is approaching their local Citizens Advice Bureau for advice. Or, if they truly need money, they could always turn to other options as well, such as family, Credit Unions (which only 2pc of people did), or a friend. In fact, about 25pc of people did turn to a friend or family member for money when they were turned down.