According to the FCA, which assumed responsibility for the sector in April of this year, rules state that advertisements must be clear, fair and not misleading for consumers.

Of the 500 advertisements examined by the FCA across all kinds of media, 108 were found in breach of these rules. Payday loan companies struggled most to stay within the guidelines.

Clive Adamson, director of supervision at the FCA, said: “It is particularly important in this sector that advertisements for financial products enable customers to make informed decisions. We think that more can be done to ensure that advertisements are fair, clear and not misleading.”

Any advertisements where customers are encouraged to apply before having a chance to access important information are forbidden, as are advertisements targeting young people, claiming that products will repair a customer’s credit rating or suggesting that a debt will be cleared when in fact it is just being substituted for another.

75 of the firms in question have already amended or withdrawn the promotion in question. The rest are in the process of responding.

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Adamson concluded: “Firms have responded well when challenged about ads which have not met the standards. We will continue to work with firms and monitor their performance in this area to ensure the high standards we are looking for are met.”