A number of UK loan providers are using social networking websites to hunt for young debtors, it has been revealed.

According to the debt charity, Consumer Credit Counselling Service (CCCS), providers of high-interest loans such as an unsecured loan, are targeting the young generation.

Spokesperson, Frances Walker of CCCS said: "Payday lenders are a growing phenomenon in the context of the credit crunch because as people, particularly the less well off and very young for example, find it very hard to find credit.

They are turning to these other sources of credit where the interest rates and the APRs are very high… providers seem to have a forte of targeting young people because they have taken out quite a lot of advertising on things like Facebook."

Meanwhile, many lenders have announced that they will stop selling Payment Protection Insurance (PPI) with Loans.

High street banks, Alliance and Leicester, Barclays, the Co-operative Bank, NatWest, the Royal Bank of Scotland (RBS), Bank of Scotland, Lloyds TSB and Halifax, has said that they will not be offering single premium PPI insurance with unsecured personal  loans from February.

Jon Pain, Managing Director of Retail Markets at the Financial Services Authority (FSA) said, “We are pleased these firms have stopped selling single premium policies and would expect other firms to notice these developments and review their own positions.”