It is seeking views on a draft consultation on a framework to regulate the credit schemes, which allow shoppers to spread the cost of an item over a 12-month period. Many companies provide these payment schemes, including Adidas, Curry’s and H&M using financing companies such as Klarna and Clearpay.

At the moment, there is no regulation and the loans are not covered by the Consumer Act which means people can take out multiple loans without any controls.

The schemes have been criticised as many people tie themselves into too many monthly payments plunging themselves into unaffordable levels of debt.