The watchdog decided to take the action following an inquiry by MPs on the Treasury Select Committee found that many customers were being ripped off.

Store card providers have been charging very high rates of interest – with the average APR being between 26 per cent and 33 per cent.

In addition, it has been claimed that customers have been refused permission to see details of the terms they are signing up to.

Of particular interest to the OFT will be GE Consumer Finance, which the MPs found controls around 70 per cent of the UK store card market.

Although the sector is small compared to credit cards – it is worth just £4.5 billion – it is growing rapidly.