Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k custs

[meellis]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

It makes my blood boil because a lot of the money owed in my bankruptcy estate was due to these legal firms, I have rakes of letters from Mercers (Barclays) and I am sure SCM and others. If PPI, Bank Charges and these legal charges were all considered then my actual debt for bankruptcy could have been restructured and a payment plan organised. I am sure this would be true of a lot of people.

[PAWS]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

This is ridiculous -there has to be some way of getting back what has been 'swindled' out of people. I also agree with Andrew – Vince Cable is just wittering out the same old rhetoric. I have already had a hissy about him in my post no. 210! Gosh I am boiling about this. All these laws and regulations and because the victims are debtors they are broken and ignored. What is worse is the idiots who are supposed to protect and uphold these rules never seem to hammer the law breakers. Is it because they know that the debtor has suffered indignity, shame and spirit breaking and has therefore not the mental strength or physical resources to cry foul. Anyway, why does the debtor have to fight the lawbreakers all the time and still wind up getting punished by the court?

[Fred]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Without wanting to criticise any bodies thunder on the down trodden debtor..............it is my experience that when given opportunities to complain people just fold & take what is coming, the amount who do not follow up their complaints is very high to.

Again its not a criticism but an important question is "are people empowered to do the right thing" it makes me wonder whether there is enough information freely available in layman's terms, a statistical game this is & there is not enough being reported from/by consumers as a whole.

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Found this on a google search for the SLC ones.

If you don't read the small print you would think it was an external company working for "their client".

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

And an MSE article on SCM, DG, Green & co. et al

http://www.moneysavingexpert.com/new...bted-customers

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

http://news.sky.com/story/1295002/wa...letter-tactics

The City watchdog has urged people to send it copies of letters from debt recovery companies purporting to be working on behalf of high street names.

The Financial Conduct Authority's request comes amid reports that some banks and utility companies have sent 'bullying letters' to those in arrears over payments.

The letters may appear to be written by outside debt agencies, with only a passing mention of an in-house connection between debt collector and creditor.

The City regulator told Sky News: "The FCA is unable to comment on the activities of individual firms, but we are aware of these reports.

"We would request that anybody who has further information about this type of practice passes it onto the FCA."

The Solicitors' Regulation Authority (SRA) said it was investigating a number of complaints that have given it "cause for concern".

SRA executive director Richard Collins said: "We will shortly be issuing guidance for in-house solicitors on our existing requirement that publicity must not be misleading.

"This will make it clear that they cannot use forms of words that give the impression that they are an independent law firm and not employed solicitors."

Lloyds Banking Group confirmed that it owned a Scottish-based subsidiary, Blair Oliver & Scott Ltd (BOS), which was used for sending out letters.

The bank insists BOS, which operated from 1991 to 2013, did not undertake legal recoveries - only debt collection.

It told Sky News: "Blair, Oliver & Scott Ltd ... functioned as a debt collection company collecting debts owed to companies within what is now Lloyds Banking Group (previously HBOS plc and Bank of Scotland groups) in relation to a range of accounts including Bank of Scotland and Halifax overdrafts, loans and credit cards.
"It also acted as a debt collection agent for companies outside the Group such as utilities companies."

RBS previously used independently regulated in-house law firm Green & Co, along with Triton Credit Services.

An RBS spokesperson said: "Our customers should never be in any doubt about who they are communicating with.

"We have reviewed our policies in this area and will stop the use of any solicitor or debt collection brand names in correspondence with our customers that could cause confusion."

A Barclays spokesperson said its in-house firm was being wound down and told Sky News: "All debt collections are now carried out under the Barclaycard name, following a decision we took in April this year to end the use of separate companies.

"Mercers Debt Collections Ltd previously managed some collections work on behalf of Barclaycard but it was made clear to customers that they were a company within the Barclays Group and collecting on our behalf."

The Student Loan Company (SLC) was recently revealed to have used a similar tactic, since 2005, over university tuition fee arrears beyond three months.

On July 1, SLC said: "We (have) developed new letters which removed reference to the Student Loans Company as a 'client' and increased the font size of the footer which said 'Smith Lawson & Company is a trading name of the Student Loans Company Limited.'"

The revelation of apparent widespread use of the third party letters comes after payday loan firm Wonga issued fake legal letters to 45,000 customers.

The FCA made Wonga pay more than £2m in compensation for the practice carried out over a number of years, including charging some borrowers administration fees.

The Law Society said Wonga's action may have amounted to blackmail. Shortly afterwards, City of London police said it would reopen its 2013 examination into Wonga's activities.

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

RIP to Mercers as well then.

Sounds like most of them knew the death knell was coming for these tactics, so were quietly bailing on them before April?

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

I also note that if BOS did not undertake legal recoveries, then how could they make a statements like....

Our client has instructed us to commence court proceedings.

etc

[Wombats]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Ah, the D Hood of a thousand signatures! At least that one is legible. How many actions are threatened by faceless corporations (a squiggle as a signature, no printed name, just the name of the supposed solicitors).

The matter of whether or not someone can either lawfully sign the name of a solicitor, or the solicitor can endlessly change their signature so it appears to have been signed by a lot of different people should also be asked.

If a signature is not pp'd, does it not constitute forgery?

[dogtired]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Posted my identical Blair Oliver Scott earlier.
Do I send a copy of this to the FCA?

[EXC]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Sounds like most of them knew the death knell was coming for these tactics, so were quietly bailing on them before April?

Sounds like that to me too. Makes you wonder if they had some kind of tip off from OFT/FCA.

This whole issue is really gaining some traction now. It's the lead story in today's Financial Times:

UK banks face demand for inquiry into lawyers’ letters

Ministers and regulators are under growing pressure to launch an investigation into how many of Britain’s biggest companies are sending misleading letters that appear to be from independent lawyers or bailiffs to get their customers to pay off debts.

Senior Conservative and Labour MPs called on the financial watchdog on Friday to launch an inquiry into the issue amid mounting evidence that companies in several sectors had resorted to the practice of sending letters purporting to be from third-party law firms or debt-collection agencies.

Three of Britain’s biggest banks – Royal Bank of Scotland, Lloyds and HSBC – have regularly sent customers letters on paper headed with the names of law firms that were actually from the banks themselves. Barclays has in the past sent letters under the name of a subsidiary when chasing debts from credit-card holders.

The revelations come a week after Wonga, the payday lender, was ordered to pay £2.6m in compensation after it sent letters from bogus law firms to customers who were in arrears, leading them to believe their debts had been passed on to a third party.

Stella Creasy, Labour’s shadow business minister, said: “The Financial Conduct Authority is investigating debt collection practices in the payday lending market. Today’s revelations show that this should be expanded into other areas.”

Her concern was echoed by members of the influential cross-party Treasury select committee.

Pat McFadden, a Labour member of the committee, said: “This practice looks to have been more widespread than we first thought. We need a broader look at this practice to find what has been going on.”

Andrew Tyrie, the Tory MP who chairs the committee, is writing to some of Britain’s biggest high street banks for an explanation of why they have sent warnings to some borrowers which purport to be from independent firms of solicitors or debt collectors.
Mr Tyrie said on Friday: “Customers should know who they are dealing with. It seems they may not have done..”

Charlie Elphicke, a Tory ministerial aide, gave warning against “disgraceful intimidation tactics”, adding: “It’s important to know how far this goes.”

Lloyds, Barclays, HSBC and RBS said they had complied with regulations, and none is alleged to have broken the law. Barclays and HSBC said they now only sent correspondence under their own brands, while RBS said it would also do the same in future.
Lloyds said earlier this year that it would “phase out” the practice. But letters are still being sent bearing the name SCM Solicitors. The bank is planning to stop sending the letters within the coming weeks.

The Student Loans Company also came under fire last week for having used similar techniques, writing to debtors from a firm that appeared to be an independent debt recovery group but was instead a subsidiary of the company. The SLC has recently stopped using the name Smith Lawson.

Utilities Anglian Water and Scottish Power have both used the name of subsidiaries when writing to customers to claim bad debts. Those companies said they had made clear who owned the firms involved when writing.

Citizens Advice is now calling on the FCA to examine whether debt collection practices are unclear and if compensation should be paid to customers.

Gillian Guy, the group’s chief executive, said: “People who are heavily in debt are under immense financial strain and need to know where to go for help, not be harassed by bogus companies exerting undue pressure and in some cases charging them for it.”
The FCA said it was unable to comment on the activities of individual firms, but that it was aware of the reports. “We would request that anybody who has further information about this type of practice passes it on to the FCA,” said a spokesperson.

[EXC]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Posted my identical Blair Oliver Scott earlier.
Do I send a copy of this to the FCA?

I would send it via their whistleblowing address http://www.fca.org.uk/site-info/contact/whistleblowing

[dogtired]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Will do, thank you

[dogtired]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Done !:tinysmile_aha_t:

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

That is more for people who work in financial services to use to whistleblow on their employers I think?

Probably makes no difference in the end, but I usually send to.

consumer.queries@fca.org.uk

making sure it's clear it's a complaint, and I get a non-auto reply a few days after the auto-relpy, sayign what department/team it's been refereed on to.