Critics say the payday loan industry was just caught in a big lie by state regulators, but the industry contends instead that figures by regulators are deceiving.

For years, payday lenders told the Utah Legislature that more than 90 percent of their customers pay off their high-interest loans on time, within 14 days — which it said shows most can afford the loans and are not trapped into spiraling debt.

But regulators have found that the average payday loan in the state actually lasts for 31 days, according to the just-released annual report of the Utah Department of Financial Institutions.

Obviously, it seems difficult to believe that 90 percent of loans could be paid on time if the average loan lasts more than a month. But the payday loan industry says that is exactly what is happening, so the average reported by the state is deceiving.

"You've got several loans that may go for months," and "that is skewing the data," said Frank Pignanelli, lawyer/lobbyist for the payday industry's Utah Consumer Lending Association. A former state legislator, Pignanelli also is a Deseret News columnist.

"It (the 31-day average length of loans figured by regulators) is correct in the sense that it may be an average, but it's a small number (of long-lasting loans) that's jumping it up," Pignanelli said. He said most larger payday lenders report that most loans are paid within 14 to 17 days.

"We still stick by the 14 to 17 days because most people are paying off their loans in two weeks," he said.

But Linda Hilton, director of the Coalition of Religious Communities and a longtime critic of payday loans, says the numbers show that "the information we have been provided by the industry in the past is not accurate."

She added, "Data collected by other states would be consistent with what our (new Utah) data is showing here. We had thought all along that Utah couldn't have a better repayment market than rest of nation, and now the data shows that."

Hilton and other advocates for the poor have argued that payday lenders make big money when customers take out loans they cannot repay, and then keep extending them at 500 percent annual interest or more, and cannot dig out of the loans.

For example, the Deseret News found last year that the majority of small claims lawsuits in Utah are filed by payday lenders. They sued 27,000 Utahns for default between 2005 and 2007 (or about 24 people a day). That accounted for 51 percent of all small claims cases on the Wasatch Front, and 81 percent of all cases in Provo.