The financial regulator has also expressed concern that such lenders fall outside the scope of the consumer-protection code which came into effect last week.

"This means that borrowers do not have the protections in the new code such as the right to have complaints dealt with speedily, efficiently and fairly and also be given clear information about the terms of the loan, " said a spokeswoman for the regulator.

"We believe that it is important that these protections are put in place and we are working with the Department of Finance to develop proposals for amending legislation to address our concerns, " said the spokeswoman.

Speaking in the Dail, finance minister Brian Cowen said he will "consider" including sub-prime lenders in the new code when the EU's third money laundering directive is transposed into Irish law in December.

Though Mabs acknowledges that sub-prime lenders provide a service which allows people in debt to buy or keep a home when banks would not touch them, it warns that borrowers are running the risk of losing their homes.

"There has been a significant increase in the number of people coming into our offices around the country who have remortgaged their house with a subprime lender in a bid to pay off mounting debts, " said Deirdre Rice of Mabs.

Through bad money management people fall into arrears on their mortgage payments and accumulate credit-card and other debts which they cannot pay off.

The mainly foreign-based subprime lenders heavily advertise that they will 'restructure' your debts by remortgaging your house. But this means all debts are tied to the home and this is very risky, said Rice.

The number of new summonses issued by the High Court to repossess houses increased from 205 in 2005 to 311 last year, according to figures released by the courts service. Similarly, possession orders carried out increased from 165 to 199 in the same period.

"Sub-prime lenders are allowed charge over the odds for the loan to compensate for the risk of lending to somebody with a poor credit record. They charge at least 3% above the going rate or higher depending on the level of debt, " explained Rice.

This makes it harder to meet repayments while ignoring the crucial questions as to how the person got into debt in the first place, said Rice.

"Sub-prime lenders are also extremely difficult to negotiate with if you do get into trouble.

They move in very quickly, " she warned.

Ironically, Rice said the current slowdown in house prices may see many of these companies quit Ireland. "These companies tend to set up in countries going through a property boom, stay for a few years to capture the business and then move on when the boom falls off, " said Rice.

Case study: John and Mary risk losing their home to lenders

John and Mary (not their real names) are in their early 40s, married with three children and own their own home in south Dublin.

John has an average job which, with overtime, can pay /750 a week.

Mary minds the children.

They regularly missed mortgage payments and utility bills and ran up credit-card debts.

John worked large blocks of overtime to pay off mounting debts which just kept the debtors from the door.

Last year, John fell ill and was out of work for 10 months. They ran up total debts of /65,000.

Mary, who also became ill, decided against Mabs advice and remortgaged their house with a subprime lender to pay off all their debts.

With debts paid off through expensive sub-prime re-mortgaging, John and Mary have resumed their bad habit of using John's overtime to pay off debts which have started to mount again. There is a high risk now that John and Mary will lose their home, said Mabs.