Warning to lenders not to cash in on crisis

Consumer credit firms have been warned by a finance industry watchdog not to exploit the cost-of-living crisis to promote their services.

The Financial Conduct Authority (FCA) says it had seen financial promotions including phrases such as "no credit checks" and "loan guaranteed" and there is no excuse for adverts making borrowing look less risky or easier than it is.

It want on to warn that lenders and brokers who do not stop using misleading terms in their advertising face regulatory action.

It has written to nearly 28,000 consumer credit firms expressing its views.

If firms fail to comply, the FCA action could include banning adverts or even removing permissions for them to engage in regulated credit activity.

Sheldon Mills, executive director of consumers and competition at the FCA, said: "The rising cost of living means many more consumers may find themselves in difficulty.

"When people are looking for a loan, it's vital that they have the full picture about what this might mean and the risks involved - particularly if they are already in a difficult financial situation.

"There is no excuse for adverts to make borrowing look easier or less risky than it is and they should be seeking to help customers through the cost of living crisis – not exploiting it in their marketing."

People who are struggling financially are being advised that they can get free help from the UK-backed MoneyHelper guidance service.

Charities such as StepChange, Citizens Advice, the Money Advice Trust and Christians Against Poverty can also offer support.