MPs slam scary looking debt letters
Proving they’ll stop at nothing to make a buck, Barclays, Halifax, Lloyds, RBS and HBSC have been accused of putting the frighteners on customers by sending them letters which are designed to look like they come from debt collecting agencies.
The letters - which are actually from the banks themselves –look like they’re from third party solicitors or agencies to scare people into settling their debts.
But these companies are fictional. For example, Barclays use the pseudonym ‘Mercers Debt Collection’, Scottish Power ‘Sterling Collections’, and Lloyds have really pushed the boat out with a triumvirate of imaginary solicitors, ‘Blair, Oliver and Scott.’
And this trick is used not just by banks, but by utility companies and student loans companies, too.
Everyone was roundly outraged when it was revealed last week that Wonga was using a fake debt collecting company to ‘encourage’ customers into paying back their loans. And the FCA ordered them to pay £2.6m in compensation.
However it seems to be standard practice across the board. Labour MP Stella Creasy slammed the letters, saying:
‘These letters seem to have been designed to frighten people into thinking that they are further along in the debt process than they are. At best, they are not being transparent, and at the worst they are being downright deceptive. It’s disgraceful.’
So why fine Wonga and not the others? Marc Gander from the Consumer Action Group said:
‘All the companies that employ these tactics, whether it is the Student Loans Company, the banks or utility companies, should face equal scrutiny and equal sanctions. Action needs to be taken.’
You bet it does.