CONSUMER campaigners are urging the regulator to investigate claims that customers of major banks have been sent Wonga-style misleading letters chasing them for payments.
Customers of Lloyds, Halifax, Royal Bank of Scotland (RBS), NatWest, Ulster Bank, Barclaycard and HSBC received letters which were from either lawyers or debt collectors which were actually brands operating within these respective banking groups.
Banks said it was made clear in these letters that the firms sending them were based in-house.
But concerns have been raised that, as in the case of payday lender Wonga, some people may still have wrongly got the impression that the debt had been escalated to an outside third party, making them feel under pressure to pay up.
The banks said they have since stopped using the different brand names altogether or are phasing them out.
It also emerged that some utility firms have also chased debts using the names of different brands based within their companies.
A key distinction between the letters sent on behalf of the banks and utility firms and those from Wonga is that the letters involving banks and utility companies were from real organisations, while the Wonga letters were from firms which did not exist.
Citizens Advice wants the Financial Conduct Authority (FCA) to consider whether, as in Wonga’s case, people who have received such letters should get compensation, and Which? said the regulator should delve further into exactly how banks communicate with customers who owe them money.
Andrew Tyrie, chairman of the Treasury Committee, also voiced concerns, saying: “Customers should know who they are dealing with – it seems they may not have done. I will be writing to the banks for clarification.”
The FCA said it is aware of reports about the incidents and it wants to hear from anyone who has further information about this type of practice.
A furore erupted last week when it emerged that Wonga had sent fake legal letters to customers. The payday lender was ordered to pay a total of £2.6m in compensation after sending the correspondence to around 45,000 people.
The City of London Police are currently looking again at the incident involving Wonga to see if further action is needed. It also recently emerged that the Student Loans Company has, in the past, sent out letters which were feared to be potentially “misleading”.
Richard Lloyd, Which? executive director, said: “These practices seem to be designed to put pressure on people and the FCA should now investigate how banks communicate with customers who owe money.”
A spokeswoman for RBS said: “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 Barclaycard spokesman confirmed Mercers Debt Collections Limited had previously managed some collections work on behalf of Barclaycard. He said all debt collections are now carried out under the Barclaycard name, following a decision taken in April.
A Lloyds Banking Group spokeswoman said it endeavoured to support customers in the most simple, straightforward and transparent ways possible.