A financial regulator has found that a fifth of newspaper advertisements promoting credit cards breached the law.
The Office of Fair Trading, which is responsible for regulating the credit card industry, was lambasted by MPs last year for not protecting consumers from "highly misleading" marketing.
Yesterday the OFT said initial work on compliance of credit card marketing with advertising regulations showed about 20 per cent of adverts in national papers "contained non-technical breaches of the law".
The regulator is to launch a wider study in this area later this year. It is also considering whether it needs to set out guidelines for credit card marketing.
The OFT said that, during the past four months, it had considered the marketing of 14 new offers from credit card companies, of which only eight were found to be compliant with the law.
The regulator has already taken action against three card companies, including Barclaycard, for its controversial "0 per cent forever" offer. A number of cases are still under investigation.
The OFT last year opened an informal inquiry into store cards and the interest rates they charge. It is expected to outline its findings tomorrow and could recommend further action.
The OFT's action on credit card marketing was published yesterday in its official response to a damning report into the credit card industry by the Treasury select committee.
The committee report had painted a picture of a ruthless and rapacious credit card industry, and had criticised the "passivity" of the OFT and the "pedestrian approach" of the Department of Trade and Industry, which regulates consumer credit.
Yesterday the DTI said it "strongly rejects the suggestion" that it displayed a lack of awareness in reforming consumer credit legislation.
It said the measures published in the recent consumer credit white paper were designed to increase transparency and give consumers the information they needed. "The reforms will ensure that all credit advertisements are clear, fair and not misleading."
The DTI is considering requiring credit card issuers to include a warning on statements about the implications for consumers of only making minimum payments on credit card debt.
