The market analyst group, Datamonitor group warned that lenders were likely to try to recoup some of the additional costs through higher charges for consumers.

It said the tight implementation schedule, a lack of adequate preparation and fears of increased bureaucracy and cost were a major worry for the credit industry.

Datamonitor has also said that the new rules could force smaller specialist lenders, such as those who lend to people with an adverse credit history, out of the market and create space for more unscrupulous providers.

Report author Oksana Selezeneva said: “Consumers with adverse credit histories could potentially be faced with a higher cost of credit and less protection.”

Additionally: “It is also likely that mainstream providers will attempt to compensate for lost revenue streams and additional expenses in relation to compliance efforts and pass some of the costs on to their clients.”

More than half of the providers Datamonitor spoke to said they thought the changes would lead to consumers being charged higher loan rates.

A spokeswoman for the Department of Trade and Industry said: “There may be some additional costs for business but we try to make these fair and balanced. Any cost to business will not outweigh the benefits to consumers, enforcers and business when we have a more transparent market.”

This first part of the government’s overhaul of the Consumer Credit Act is due to come into force in October.