A charity for debt has felt it necessary to alert the public that a large number of Credit Company’s are not paying attention to regulations when they advertise on social networking sites such as Facebook.

Credit Action have carried out a study in which they found most adverts appearing on such sites do not feel it necessary to outline all the information related to the loans they are putting on offer, that should be written up there according to advertising laws.

The adverts are generally for products such as credit cards and loans made for the sake of the borrower’s salary or vehicle.

The problem seems to be that the companies are failing to mention the annual percentage rate (APR) of the interest for which the borrower would eventually be asked to pay.

According to stipulation, this must be mentioned if the advert offers provocative extras such as payment-free periods or free gifts. Another aspect, which should be included, is the rate, depending on if the advert gives the impression that it has a better rate of credit than other corporations.

Or if it insinuates that the loan is the best choice for someone with a poor credit history. Case studies by the charity have shown shocking examples of companies failing to mention this highly necessary information, such as in one advert where the loan on offer had an APR with an interest rate of 1,355% which had not been alluded to in any way.

Credit Action have taken the matter into their own hands by writing to the Office of Fair Trading concerning the unlawful advertising. As well as this it has made its own Facebook group called “Debt can seriously cramp your style!” hoping to inspire consumers to make sure they report any adverts they notice that do not stick to the regulations and are taking advantage.

The chief executive of the charity, Malcolm Hurlston has announced that some of the businesses are US-based lenders who did not know about the advertising rules in the UK before they put the adverts on show, although there are many others that are big name companies who have been working in the country for years and therefore would have been aware of the regulations for a long period of time

"These are the day-to-day realities of the credit crunch - creditors thinking up new ways of offering the young and the less well-off the credit they need, or think they need, in new forms, such as against their car (logbook loans) or against their salary (payday loans)," he said. "We must be sure that such creative products concur with existing rules and regulations and offer customers the full protection of the law". A spokeswoman for the OFT said the adverts were still under investigation. "If a business is not complying with the law then there are a range of measures we can take up to revoking its credit license," she said.