More than 50 doorstep lenders have been warned to improve their standards or face action from the trading watchdog.
The Office of Fair Trading said it had taken enforcement action and sent letters to more than 50 firms in the home credit sector, as part of its work to improve standards.
It said more than half of all applicants for a home collected credit licence during the past year had failed to satisfy it that they would provide customers with the right information and credit documentation, including applications from firms that were renewing their credit licence.
The group said although most large providers and lenders which were members of trade associations complied with its requirements, other firms had failed to put appropriate compliance procedures in place.
Problems included failing to obtain permission from consumers to call at their homes and offer credit, not supplying pre-contract information and not talking people through the costs of the credit, as well as failing to explain consumers' cancellation rights.
The OFT recently refused to renew the licence of a lender that had committed an offence involving dishonesty, as well as showing a lack of the relevant skills, knowledge and experience required.
In another case, an application was refused after the applicant failed to declare the involvement of a business associate who had committed fraud.
Doorstep lenders advance small sums of money to borrowers who would be turned down by mainstream firms.