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Tough market conditions mean firms are more at risk of breaching treating customers fairly principles, Sarah Wilson, director for TCF for the FSA, said.

Ms Wilson said financial pressure was being exerted on all firms making it even more important to push ahead with treating customers fairly regulations.

She said: "Times are very hard for firms but this does not mean we can let momentum on TCF drop. There is even more potential risk of customer being treated unfairly at the moment by, for example, overzealous selling, providing unsuitable advice, applying unfair claims criteria or inappropriate treatment of customers in arrears."

Ms Wilson said TCF was already an existing requirement which many firms had worked hard on embedding. She said: "Significant energy has been devoted to this and a major opportunity would be lost if we did not capitalise on this to deliver real improvements."

Referring to firms who would be expected to conform to TCF, Ms Wilson said firms not involved directly with the end retail-clients would only remain outside the usual scope of the TCF initiative if their actions did not have a material impact on the overall outcome.

She said: "While some firms remain outside the remit, we would still expect good practice and compliance.

"We expect firms to have appropriate management information in place including product design, clear information on products or decisions made, suitable advice, meeting consumer expectations and post-sale barriers which is often the biggest source of complaints."