A FINANCE firm based on Chester Business Park has been criticised by an advertising watchdog following complaints about an 'alarmist' mail campaign offering people personal loans.

The Funding Corporation Ltd had its wrists slapped by the Advertising Standards Authority (ASA) this week after sending out half-completed loan application forms to people, and a specimen £6,000 cheque made out to them.

The letters, sent to people across Britain, were so misleading people thought they had agreed to a loan on opening them.

The Funding Corporation's national mail campaign - which has now been changed - was brought to the attention of ASA following complaints from members of the public in London and Scotland.

ASA upheld the complaints, which come at a time when personal borrowing is at an all-time high.

New figures show that £18bn was borrowed in February through loans, over-drafts and credit cards.

This week, 84-year-old Lincolnshire woman Kate Purnell hit the headlines after being allowed to run up debts of £30,000 on 20 different credit cards. The OAP suffered a stroke because of the stress of falling behind on her repayments.

Her case comes just two weeks after Stephen Lewis, a 37-year-old father of two, hanged himself after running up debts of more than £65,000 on 19 different credit cards.

In the Funding Corporation's personal loan campaign, the front of the mailing was headed 'loan information document' and had three sections.

The first featured a specimen cheque for £6,000 made out to the recipient, the second was in the style of a loan application form and featured the recipient's name, the loan amount of £6,000 and monthly repayment figures shown in boxes.

The third section featured a box which was headed 'details on how to apply' and contained information about how to apply for a loan and stated the APR rate. The reverse of the mailing letter listed the benefits of the advertisers' service.

The complainants objected that the mailing was misleading and alarmist because it resembled an official form that had been already completed.

ASA says the Funding Corporation campaign was misleading as the first part of the mailing implied that an official form had already been completed and a cheque issued. The authority believed that readers' initial impression would be that a loan had already been taken out in their name.

Bosses at the Funding Corporation's head office in Hilliards Court, Chester Business Park, this week changed their practices in light of the ASA's ruling.

Marketing spokesman David Titmus said his company had been in touch with the ASA and had changed its public loan application packages after negotiation with the advertising watchdog, adding: 'They asked us to change something and we have changed it.'

Janice Allen, of the National Consumers Council, said: 'This case illustrates that complaining to ASA about misleading and alarmist marketing material gets results.'