Scrutiny of newspaper and magazines by the Office of Fair Trading (OFT) found that two-thirds of loan adverts did not meet strict advertising rules, and were therefore in breach of the law.

Most of the discrepancies involved APRs and unreadable small print, both of which caught out unsuspecting customers.

According to a recent MORI poll, only a third of people were aware that there was an early redemption charge, whilst others were totally unaware what the charge was because of unclear adverts.

Chairman of consumer finance website moneynet, Richard Brown, said: “At moneynet we question the effectiveness of quoting APRs in loan adverts for several reasons.

“Firstly we question whether the general public really knows what this means and even those people that do understand it are probably unaware of the effect of a change in the APR on actual monthly repayments.”

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