The OFT has published its review of compliance by Payday Lenders. You can access it here
There is evidence of widespread irresponsible lending and failure to comply with standards. 50 leading firms (90% of the payday lending market) have been given 12 weeks to smarten up or lose their licenses.
As perhaps expected, issues have been found in relation to, among others, ensuring the borrower can afford the loan, understands the terms (especially repayment terms) and aggressive collection.
The OFT will refer matters to the Competition Commission.