An estimated £60 million (€76.2 million) was on loan to thousands of vulnerable families from moneylenders, the Director of Consumer Affairs, Ms Carmel Foley, said earlier this year. Moneylenders are often the only source of credit for economically disadvantaged individuals. However, consumers who fail to read the small print may sign up to such loans, or other borrowing agreements, without knowing it.

Family Money reader Mr N says his wife bought some goods on hire-purchase from a rental company some time ago. Since then, she had an accident and has been unable to work and therefore has been incapable of meeting the repayments, he says.

The couple rang the company to say repayment would be made in full when a settlement was reached in the wife's case. However, the company notified them that the APR on the agreement was 30 per cent. Mr N believes this is an illegally high interest charge.

The company claims that it is a legal moneylender and may charge what it likes. Furthermore, the company claims it advertises regularly in newspapers stating the APR of 30 per cent. Mr N maintains he has never seen these advertisements. He does not believe his wife was informed of this rate when she made her purchases.

The European Consumer Centre's legal adviser Mr Colin Daly says our reader first needs to be very clear about which type of agreement was signed - consumer hire, hire-purchase or a money-lending agreement.

Consumer hire is a leasing agreement when goods are rented for a set price and then returned to the company.

Hire-purchase means goods are rented over a specific period of time. When payment is completed, ownership of the goods passes to the consumer. There is no interest charged on hire-purchase goods because a lump sum of money is not being borrowed, says Mr Daly.

If our reader's wife actually took out a loan for the goods, rather than signing a hire-purchase agreement, then an APR may be charged. Legally these documents must prominently say "Moneylending Agreement".

Thanks to Hollywood gangster films, the term "moneylender" evokes images of delinquent borrowers with broken bones. In reality, many Irish moneylenders are legitimate individuals or businesses licensed by the State.

Moneylending was legislated for in the Consumer Credit Act, 1995. Before the Act, there was a ceiling of 39 per cent per annum on interest charges, says Mr Daly. Since the Act, there is no APR ceiling because the Government wanted to bring more moneylenders under regulation, he said.

According to the Director of Consumer Affairs' register of authorised moneylenders, these APRs range from 197 per cent charged over 20 weeks in central Dublin to 18.5 per cent over 36 weeks in Waterford city.

All moneylenders must provide customers with detailed agreements showing the total cost of credit, the rate of interest and how money is to be collected. The agreement must be issued with a repayment book that shows the outstanding balance.

A Consumer Affairs spokesman says there is nothing in the Consumer Credit Act stipulating what happens when the borrower suffers from an accident or injury. However, the Act makes provisions for challenging the lender in court if the interest is considered excessive. The director or a solicitor may make that challenge.

Certain criteria are used to determine "excessive interest" including: interest rates prevailing during the loan; the person's age, mental competency; and the level of literacy and the numeracy of the consumer.

If the reader's wife has actually signed a hire-purchase agreement and the company has fulfilled all aspects of the agreement then she is bound by the terms of it. However, this type of agreement never includes an APR.

Mr Daly says the reader and his wife should talk to the company and try to come to an agreement. They should be aware of the one-third and one-half rule in relation to hire-purchases.

If the consumer has paid more than one-third of the final price then the company cannot seize goods without a court order. If they paid a half or more of the hire-price, consumers may hand back the goods and discontinue the repayments.

Consumers with questions about loan contracts and other types of borrowing should contact the Money Advice and Budgeting Service in their area.