Financial firms still lacking clarity

In its report, the authority accused financial firms of failing to always give correct advice, which could lead to people getting into debt.

Welcoming the report, the chairman of the Financial Services Consumer Panel, John Howard, said: “For consumers to have confidence in the financial services industry, they need to be able to trust that the adverts that they see, the documents they read, and the advice they are given are all clear, fair and not misleading.

“That is what ‘treating customers fairly’ should be about.”

Mr Howard added that it was not just good enough for head offices to say that they were treating customers fairly, but high street branches must do so too.

The FSA report follows one published in June which said that in many cases mortgage documents were not up to scratch.

Now it says that other information given should improve, meaning that many customers could be piling up debt because they were ill-advised about the products they took out.

ClearDebt chief executive, David Mond, said: “It probably should be a case of ‘buyer beware’ but we have many clients as likely to have been over-sold to as they are over-borrowed.

“Increasingly consumers are finding they cannot repay their debts – and whilst it is hardest for them, shareholders in loan companies may also begin to find the value of their investment affected by over-selling.”