Rent-to-own firms provide customers with household goods such as washing machines, fridge freezers and TVs on a hire purchase agreement. They usually target low income families and those with poor credit scores.

The Financial Conduct Authority (FCA) is looking to implement a price cap by April 2019, but it is still deciding exactly what form this will take.

Charity Citizens Advice suggests a 100% cost cap, including on interest and charges associated with the products which could save consumers up to £62m on 245,000 goods.

It wants to see rent-to-own goods become more affordable. By limiting the upfront cost of the item, plus installation, delivery fees and interest, the outstanding levels of debt held by rent-to-own customers would be reduced, it said.

Around 400,000 people have rent-to-own debt in the UK and last year Citizens Advice helped more than 5,000 people with problems relating to these loans. The average amount of rent-to-own debt was £972.

But a total cost cap on items like washing machines, fridge freezers and televisions could save consumers £276 (28%) per product, Citizens Advice found.

It also wants to see limits on late payment charges at £15 per agreement per year. Nearly 60% of rent-to-own customers are charged late payment fees, commonly amounting to £72 over the course of a loan.

Gillian Guy, chief executive of Citizens Advice, said: “By 1 April 2019, it will have been 853 days since the FCA launched its high-cost credit review. Until a cap is introduced, consumers will continue to pay over the odds for these high-interest products.

“Caps can work, we’ve seen this with payday loans where thousands of consumers have been protected by the FCA and are now better off as a result.

“The FCA has recognised the massive harm caused by the high interest rates on tempting rent-to-own deals. It should now stick to its own deadline to implement a cap. No one should have to pay more than double what they borrow.”