Britain's short-term lenders will face tougher rules on how they advertise as part of new measures to prevent borrowers being taken advantage of when they are in financial need, the government will say on Wednesday.
So-called payday lenders could face limitations on the number of television advertisements they can place in an hour and the times they can advertise and will be forced to make sure their annual interest rates are properly displayed.
The industry will be told to ensure its advertising does not lure consumers into taking out payday loans which are not right for them, government sources said.
The government will also signal that Britain's new financial watchdog, the Financial Conduct Authority, is to be given "new powers and real teeth" to enforce the rules which could come into effect in April next year, the sources said.
Payday lenders offer short-term loans, which are intended to be paid back when borrowers receive their wages.
Britons have increasingly turned to these loans as the economy struggles to recover from recession and mainstream banks have tightened their criteria for granting short-term credit.
Britain's consumer watchdog will on Wednesday publish the results of its investigations into how well such lenders comply with the law.
The Office of Fair Trading said last November it was investigating several payday lenders over aggressive debt collection and expressed concern about poor practices within the sector.
Wonga, which offers individuals short-term loans of up to 1,000 pounds, more than trebled its earnings last year. Like other payday lenders, it has faced criticism that its annual percentage rate (APR), listed on Wonga.com at 4,214 percent, takes advantage of the financially vulnerable.
(Reporting by Matt Scuffham; Editing by Helen Massy-Beresford)