Banks have become embroiled in the row over reckless car loans after mass-mailing customers to convince them to buy luxury vehicles.

Customers of Lloyds Banking Group – which also includes Halifax and Bank of Scotland – have received personalised letters offering them long-term monthly loan deals so they can buy new cars.

Their account balance, income and expenditure were assessed by the bank without their knowledge to see which models they could buy. The letters claimed high-end vehicles were ‘just a few clicks away’, offered deals for cars including BMWs and said loans of up to £60,000 can be approved without a credit check.

Last night, politicians and campaigners accused Lloyds of behaving like a payday lender and called on banks to stop sending such letters. Experts fear that irresponsible lending in the car finance industry is leading to increasing numbers of people defaulting, which could cause another credit crunch.

Last month, a Daily Mail investigation revealed how young drivers are being tempted into dangerously high levels of debt by dealers offering them new cars for no money up front.

Undercover reporters exposed car salesmen offering long-term finance deals to customers who said they were unemployed, working part-time or on low incomes.

Lloyds sent the car loan offers to customers across the country in July. One letter posted to a Lloyds Bank current account holder stated that she was eligible to borrow £18,500, which would pay for a new BMW 3 Series saloon. The customer, who asked not to be named, told the Mail: ‘Lloyds are encouraging people to spend, even overspend, at a time when finance all over the country is supposed to be tight and debt is a huge issue.

‘Why are Lloyds, who were bailed out with public money, encouraging people to take on more debt? It is intrusive. The bank is feeding off people’s sense of consumerist envy. Why do they assume that I think driving a BMW is the be-all and end-all? It’s quite offensive, really. That’s not the kind of service I want from my bank.’

As the customer already holds an account with the bank, credit checks would not have been required had she decided to take on the car loan. However, Lloyds insists that customers still have to go through ‘in-depth affordability assessments’.

British households borrowed a record £31.6 billion to buy cars last year, leading to fears of irresponsible lending. Lord Darling, who was Chancellor during the bailouts of Lloyds, Royal Bank of Scotland and Northern Rock, said the rising levels of debt should ‘raise alarm bells’ for the economy.

Former minister and finance campaigner Ros Altmann called the unsolicited car loan offers ‘very worrying’.

She added: ‘The lights are flashing red with car finance and we have to take notice. These unsolicited loan offers designed to entice customers are a real issue and I hope this problem is controlled before it gets out of hand.’

James Daley, of consumer website Fairer Finance, said: ‘This has echoes of the payday loan market. Anything that entices customers into borrowing more is already crossing the line.