Credit brokers are posing as payday lenders before charging consumers unexpected fees, Citizens Advice warned.
Due to certain brokers not making their roles clear, borrowers are hit with an unforeseen fee whether or not their loan request is rejected by the actual lender.
Citizens Advice detailed that up-front fees can total £70.
Gillian Guy, chief executive of Citizens Advice, said: “Credit brokers should not be making people’s money problems worse by charging unexpected fees.
“In some cases, brokers are preying on people’s need for short-term credit and adding to the pain of poor payday lending by posing as a direct lender.
“They must be transparent about the service they offer and any fees they charge.”
Brokers must be transparent on websites or marketing text messages, the charity said.
Citizens Advice scrutinised 490 calls to its helpline about credit brokers last June and July.