By Huw Jones
LONDON (Reuters) - New rules could soon be brought in to protect consumers in Britain from high-cost credit companies such as doorstep lenders and household appliance rental firms.
The Financial Conduct Authority (FCA) said on Wednesday that its review of the market since July last year has demonstrated an "emerging picture of the case for intervention".
It said there are ways of intervening that don't cut off cash to people that can afford repayments.
It intends to publish its conclusions and proposals for consultation in the Spring.
"We need to address both the choice and range available and how this market can work better for consumers," Christopher Woolard, FCA executive director for strategy and competition, said in a statement.
As well as being prepared to propose new rules where it has evidence that consumers are being ripped off, the FCA will look at solutions involving alternatives to high-cost credit, the watchdog said.
"Our analysis indicates that rent-to-own customers are a particularly vulnerable group of consumers," the FCA said.
They typically pay far more for fridges, televisions and other household goods by making repayments over time, and saw their total median amount of outstanding debt more than doubled from 2,000 pounds in November 2014 to 4,300 pounds in November 2016, the watchdog said.
The FCA also remains concerned about the high fees and charges for unarranged overdrafts, especially when compared to the relatively small amounts lent.
Overdrafts will be addressed separately in its strategic review of retail banking business models, which the FCA will update on later this year.
The watchdog has also asked for more data from firms who offer loans in people's homes.
Some 700,000 people took out a home-collected credit loan in 2016, with 1.6 million people having outstanding debt on these products at the end of 2016, with a total value of 1.1 billion pounds ($1.55 billion).
"Catalogue credit also remains a concern for the FCA, particularly the complexity of charging structures and how people are offered choices to make repayments," the watchdog said. This refers to people buying items on credit from catalogues and making regular repayments over time.
In 2015, a cap was introduced on interest rates charged by short-term “payday” loans, which is set to be reviewed in 2020.
The cap was introduced after criticism from MPs and the Church of England about the very high interest charged by so-called payday loan companies for often vulnerable customers.
($1 = 0.7075 pounds)