Consumer charity Which? is claiming that some sale-and-rent companies are advising homeowners to sell up without checking to see if they can afford to rent it back.
The firms buy the homes of hard up owners, then rent back the property to them so they don’t have to move.
The organization has reported two such firms to the Financial Services Authority (FSA) and claims they acted without FSA authority.
The FSA’s own investigation into the industry found instances of companies offering desperate owners only 60% of the value of their home, with exorbitant rental agreements following.
Chief executive of Which?, Peter Vicary-Smith, said: 'It's simply unacceptable that people are receiving shoddy advice about such a huge financial decision. Not only are regulated firms not doing enough to ensure vulnerable consumers make the right choices, some are offering sale-and-rent-back that aren't authorised to do so.
'The FSA must tighten the screw on these firms to make sure the rules are followed and consumers are protected.'