‘Sham’ letters continue

A couple of months I wrote about lender WONGA’s misbehaviour in writing letters to those who were behind with their payments, inventing names as if the letters had come from firms of Solicitors.  WONGA were ordered to pay £2,600,000 in compensation to around 45,000 customers.

Now the 5 major banks all stand accused of sending similar “sham” letters to customers who are indebted to them.  The Chairman of the Commons Treasury Select Committee has written to the big 5, Lloyds, HSBC, Barclays, Halifax and Royal Bank of Scotland, asking for explanations.  He said that people are entitled to feel aggrieved by the letters, which were “calculated to mislead”. John Mann, a member of the Select Committee, holds this practices “contemptible”.  He felt that it might be fraud, and called for an initial enquiry.

The invented name in the case of Lloyds was Sechiari, Clark and Mitchell, later on referred to as “SCM Solicitors”, and for HSBC it was “D G Solicitors” both the firms were registered with the Solicitors Regulation Authority, but have now been dissolved.  SCM Solicitors is in fact part of Lloyds Banking Group.  Lloyds Bank attempts to defend this action, by pointing out that their employee sending the letters was indeed a Solicitor registered by the Solicitors Regulation Authority, but it is difficult to see the need to invent a firm of Solicitors unless the intention was to mislead.  It is expected that the Solicitors Regulation Authority will shortly make it clear that nothing must be used which will give the impression of an independent law firm when in fact the firm is a branch of the creditor bank.

The City of London Police are investigating WONGA to see whether a crime has been committed, such as blackmail, fraud, or offences under the Solicitors Act.  Under this Act it is unlawful to hold oneself out as being a Solicitor if one is not so qualified.

The student loans company was also using similar misleading tactics, and appear to have now stopped. It is our impression that in general the number of misleading letters or heavy handed tactics being used by those to whom money is owed is increasing.

To discuss your circumstances please contact Robert Last on 01189 478638.