Martin Lewis, founder of the MoneySavingExpert consumer advice site, has launched a campaign to end the “lucky dip” in advertised rates on credit cards and loans, urging UK financial regulators to better protect consumers when borrowing takes a hit record level.

The campaign, which has already won the support of Prime Minister Rishi Sunak, comes at a time when millions of households are growing. Relying on credit cards Make ends meet, but find they can’t get the low-interest deals advertised by lenders.

Under current rules, only 51% of applicants accepted by a credit provider must receive a “representative rate” rate, meaning 49% of borrowers could end up being charged a higher rate.

Because the true interest rate won’t be revealed until the application and credit scoring process is complete, many borrowers may be forced to accept a more expensive offer or have unnecessary marks left on their credit file if they decline.

Research conducted by MSE found that over the past three years, 40% of personal loan applicants and 28% of credit card applicants received an annual interest rate (APR) higher than advertised.

“For years, credit card applications were inherently anticompetitive,” Lewis said. “When people apply for debt, they usually apply based on the advertised rate. The fact that they can accept large numbers of people but charge more is frustrating and dangerous – it’s shocking that there’s no cap on what they can charge.”

The MSE study found that some borrowers ended up receiving more than double the advertised rate. A man with a near-perfect credit score took out a £15,000 personal loan with a 3.3% annual interest rate, but the interest rate on the loan was 7.8%, pushing up the cost of his monthly repayments.

“I had no choice but to choose the APR offered as the mark was already in my credit file and it was a painstaking search,” he said. “It was a lucky drop when applying and may actually have made You’re in a worse financial situation.”

In line with the EU Directive, the UK started using a representative APR rate in April 2011 to harmonise rules across the EU. Until then, 66% of borrowers had to be offered the advertised rate, the so-called “typical” APR.

Lewis has challenged the financial regulator to use Britain’s exit from the European Union as an opportunity to return to a previous system in which two-thirds of borrowers had to accept advertised rates and capped the maximum interest that could be charged.

He also wants the new rules to apply to 0% credit cards, where borrowers can get interest-free payments or purchases within a few months. Currently, applicants can be offered a reduced number of months, but Lewis wants two-thirds to receive the advertised time slot.

“Lenders tend to get the bulk of their profits from the tail end, those who charge higher interest rates – usually those with weaker finances,” he said. “With the new Brexit Opportunities Minister in place, it seems This is the right time to drive change.”

The MSE report has been submitted to Treasury and the Financial Conduct Authority.

“Importantly, the APR advertised reflects the interest rates consumers are likely to receive,” Sunak said, adding that he “welcomes the report” and will ask the FCA to “assess the merits of reforms in this area”.

The FCA said: “We will continue to work to ensure credit markets are favourable to borrowers and provide the necessary protections, especially in light of the cost of living crisis. We welcome the MSE report and will discuss its findings and recommendations with them and the Treasury.”