People dependent on doorstep lenders have been ripped off to the tune of around £20 million every year, the Competition Commission has warned.
The commission said that a lack of competition in the market was preventing customers from getting the best rate they were due.
Rates are on average nine per cent higher than they should reasonably be charged, the commission ruled.
The products did win some praise however, as in many areas they may be supplying the only easy access to credit available.
“Customers value home credit because it suits their needs very well but the fact is that they are paying too much for it,” said Peter Freeman of the commission.
“Price competition between the existing lenders is weak, partly because customers seem insensitive to prices, given the greater value they place on factors such as the convenience of the loan and the difficulty in comparing prices between companies.
“We are now consulting on a number of remedies designed to help increase competition in this market and benefit customers before we publish our final report in the summer.”
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