Payday loan firms are closing down hundreds of shops after being banned from charging rip-off interest rates.
The Money Shop, Britain’s second biggest lender after Wonga, plans to shut 240 branches by the end of next month, taking its total number below 300.
The number of shops run by major payday lenders has plummeted from 1,400 at their 2013 peak to 500 with the latest closures.
The Consumer Finance Association, which compiled the figures, claimed it would force some people to turn to illegal loan sharks.
But Peter Tutton, of debt advice charity StepChange, said: “We do not believe that people will turn to illegal lending as a result of a shrunken payday loan market.”
Labour’s consumer affairs spokesman Stella Creasy, who has campaigned against payday loans, said: “The decline in payday shops has to be welcomed because it reflects the fact that the new regulations are working.”
The cuts come after the Financial Conduct Authority brought in rules that limit interest on short-term loans to 0.8 per cent of the original amount borrowed per day.
Lenders had been under fire for charging annual rates of as much as 6,000 per cent.
More than 100 firms so far – including Cheque Centre, Cash & Cheque Express, Cash Genie and Speedy Dosh – have pulled out of the payday loans market after deciding not to apply for new credit licences.
The Money Shop, owned by US lending giant Dollar Financial, said most of the 3,000 staff affected would be moved to other stores.