The Office of Fair Trading has given the country's biggest 50 payday lenders 12 weeks to change their business practices or risk losing their licences, after finding evidence of widespread irresponsible lending.

The OFT also said it proposed to refer the payday lending market to the Competition Commission after finding "deep-rooted" problems within the industry.

Payday lenders offer short-term loans, which are intended to be paid back when borrowers receive their wages.

(Reporting by Matt Scuffham)