The report stems from an inquiry into the borrowing system, where people take out small loans that are then repaid in instalments (generally weekly or fortnightly) by someone coming to the borrowers house to collect the money.

The report notes that despite customers' general satisfaction with the service, they are subject to high repayments due to the lack of competition in the home credit market.

"The home credit industry seems to us to provide a service which meets its customers' requirements," said Peter Freeman, CC's acting chairman.

"Various factors, however, appear to point towards a lack of effective competition which may mean that home credit customers pay more than they should."

The CC says there is little evidence of customers switching between lenders or price drops due to competition from other lenders or forms of credit.

The Consumer Credit Association, which represents the majority of businesses in the Home Credit industry, says that the home credit system relies on "personal relationships" rather than credit scoring or computer models.

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