MEASURES to clamp down on doorstep lending and rent-to-own schemes are expected to be unveiled this week following concerns that they are fuelling problem debt reports The Guardian.

The action comes after warnings that vulnerable people are at risk from the schemes, which have continued to flourish after a cap was placed on payday loans, popularised by lenders such as Wonga. The cap significantly reduced the cost to borrowers, but campaigners and regulators worry that people on low incomes are drawn into unsustainable debt by other types of lending.

These schemes include “rent-to-own” deals which see customers acquire items such as furnishings and electrical goods on credit, but end up paying interest of up to 1,557%, according to Citizens Advice. Doorstep lenders typically offer £100 to £1,000 directly to customers, then return to their homes every week to collect repayments.

It is understood that a clampdown is to be unveiled this week by the UK’s top financial watchdog, the Financial Conduct Authority (FCA). MPs from all parties have been pushing for the cap on payday lending to be extended to doorstep lenders and rent-to-own deals. Payday loan rates were capped at 0.8% per day of the amount borrowed, while no one pays back more than twice the amount they borrowed.

A major survey last year revealed that 3.1 million adults had one or more high-cost loans or had had one in the previous 12 months. People showing “characteristics of potential vulnerability” were twice as likely to have used high-cost credit as other UK adults. In 2016, 200,000 people took out a rent-to-own product and 400,000 had outstanding rent-to-own debt at the end of the year. Rent-to-own customers have annual incomes of around £16,100, which means they are not well-placed to deal with high-interest loans.

Doorstep lending customers, also known as “home-collected credit”, have annual incomes of about £15,500. Their total outstanding debt more than doubled from £1,200 in November 2014 to £2,800 in November 2016, with a quarter of this in home-collected credit. In 2016, 700,000 people took out a home-collected credit loan and 1.6 million people had outstanding debt on these products at the end of the year.

Rob Halfon, Tory MP for Harlow and former business minister, said he was concerned that “loan sharks and rent-to-own companies are getting their teeth into the most vulnerable”.

“It’s outrageous that some of them will end up paying back double what they borrowed,” he said. “Capping these interest rates would leave hardworking people in Harlow and across the country safe in the knowledge that they’ll get a fair deal when they take out a loan.

“The government has given the FCA the powers to bring in a cap to protect consumers from these companies. Now the FCA needs to side with consumers.”