A Bradford law firm chief whose crusade to warn about the dangers of interest-only mortgages was scuppered by the authorities says his claims about mis-selling of loans have proved correct.

John Wilson, managing director of Wilsons Solicitors, praised the new Financial Conduct Authority for warning that one million borrowers out of the 2.6 million with interest- only loans have inadequate finance to repay the capital borrowed and risk losing their homes. But he said the FCA warning does not go far enough and more should be done to tackle the issue, which it called a ‘ticking time bomb’. The FCA calculated that the average shortfall on an interest only loan could be £72,000.

Mr Wilson said: “They are telling borrowers in this position to sort it out themselves, by saving up to invest enough to pay off the mortgage or by increasing their monthly payments.

“But the borrower is the victim and why should the victim compensate the lender who ripped them off in the first place? The lender should sort it out at no expense to the borrower.

“Victims of mis-selling are now having insult added to injury by being misadvised again by the so-called regulator.”

In 2001 Mr Wilson launched an advertising campaign warning of the dangers of mis-selling but it failed to get off the ground after an objection from a financial advisor led to the advertisement being banned by the Advertising Standards Authority after one appearance in the Telegraph & Argus. The ban was supported by the now- defunct Financial Services Authority.

The objection to the advertisement claimed it was untruthful because people would not lose their home if they had never missed a mortgage payment.

Mr Wilson said: “It was obvious to many people over a decade ago that interest only mortgages were not a viable proposition.

“When people were sold them few, if any, were told of the downside. The FSA was supposed to be there to protect the consumer but in fact protected the sellers of these tainted products.

“The sales people, masquerading under the banner of ‘financial adviser’ found it an easy sell as they painted such a rosy picture of how a separate investment, like an endowment, would not only pay off the mortgage but have a nice lump sum at the end.

“I could see that it was unlikely they would be able to fulfil their promises and I feel upset that the FSA and ASA stopped me from warning people all those years ago. The FSA has now been scrapped but the ASA is still in existence and who knows how much damage it has done?

“If we’d been allowed to alert people to the dangers of these products 12 years ago we might not be in this mess.

“But thousands of innocent people who have paid their mortgage throughout may still be liable to be evicted.”