CHEAPER overdrafts from high street banks could provide an alternative to high-interest payday loans, according to Citizens Advice Scotland (CAS).
The organisation is calling on banks to become more flexible by providing greater access to fairer short-term credit.
Ahead of a Scottish Government summit on tackling payday lending to be held in Glasgow, Susan McPhee, head of policy and communications for CAS, said: "Payday loans are causing real misery for thousands of people in Scotland, and we have evidence of too many lenders using unscrupulous practices.
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"Today's summit will look at ways that action can be taken at a Scottish Government and local government level."
She added: "We are calling on banks to provide clearer, cheaper and fairer overdrafts for their clients so they have an alternative to turning to payday lenders when they need access to short-term credit.
"We are also calling on banks to become more flexible by making relatively small, short-term and affordable loans available to all of their clients."
CAS reports that it now sees an average 100 cases each week of people facing hardship as a result of taking out a payday loan.
The Herald revealed yesterday that organised crime groups have muscled into the sector and control chunks of Scotland's booming payday loan market. Officers have already shared intelligence on the gangland links of as yet unspecified payday loan firms with financial regulators, and investigations into them are under way.
John Cuddihy, Police Scotland's head of organised crime and counter-terrorism, said: "Crime groups will attempt to control the economic wellbeing of the entire community.
"We see individuals who have been put into a house owned by organised crime. If they fail to make the rent then they are simply directed towards a payday loan from a firm owned and controlled by the same crime group."