UK's regulator, the Financial Conduct Authority (FCA) has said that it is planning to conduct an investigation into the way payday loans collects debt from its borrowers.

The review comes after customers complained over the way payday loan companies treat borrowers, who are struggling to repay loans. The regulator is taking over the regulation of the consumer credit sector on 1 April and the investigation will be the first step to address issues in the industry. The regulator has also panned several other actions to make strict regulations in the industry.

The payday loans industry has said that it backs the measures to address poor practices in the industry. The FCA said that it will look at if lenders are sympathetic towards borrowers who fall behind their repayment schedule.

Martin Wheatley, chief executive of FCA said, "These are often the people that struggle to make ends meet day to day, so we would expect them to be treated with sensitivity, yet some of the practices we have seen don't do this. There will be no place in an FCA-regulated consumer credit market for payday lenders that only care about making a fast buck."