MSE News: Banking trio used dubious 'legal' tactics to pressure indebted customers

in Loans
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HSBC, Lloyds Banking Group and RBS are the latest firms caught using dubious 'legal' tactics to get people to pay debts"...
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Banking trio used dubious 'legal' tactics to pressure indebted customers

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  • fermifermi Forumite
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    http://news.sky.com/story/1295002/watchdogs-pursue-debt-letter-tactics

    Goodbye to Mercers as well. :)

    Plus FCA want to see copies of letters.
    Regulators for the City and solicitors confirm they are examining a widespread tactic to pursue debts owed to banks and utilities.

    11:17am UK, Friday 04 July 2014
    The FCA wants people to send it unclear debt agency letters

    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."


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  • [Deleted User][Deleted User] Forumite
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    That D&G letter is odd, why does it have 2 Hays logos on it? Aren't Hays a recruitment agency?
  • fermifermi Forumite
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    That D&G letter is odd, why does it have 2 Hays logos on it? Aren't Hays a recruitment agency?

    Looks like someone used post it notes with a Hayes logo on to obscure the address and personal details.
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  • fermifermi Forumite
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    http://www.ft.com/cms/s/0/9292dbd4-0369-11e4-817f-00144feab7de.html
    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.


    ......


    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.
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  • michaelsmichaels Forumite
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    Good - much better that they use external law firms who are no doubt much more expensive rather than potentially cheaper in house ones as the cost will come back directly to the debtors or just to all customers. Sounds like a major win for consumers to me.
    I think....
  • ThrugelmirThrugelmir Forumite
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    caught using dubious 'legal' tactics to get people to pay debts"...

    Shouldn't people pay their debts back?

    As those that don't simply raise the cost for those that do.

    Some media coverage these days is very poor.
  • corbyboycorbyboy Forumite
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    MSE seem desperate to present this as the latest "scandal."

    These letters are not just sent to everybody who owes money. They are sent to people who refuse to engage with lenders and ignore multiple letters. If people are struggling to repay they need to get in touch with the bank and sort things out. If people refuse this then why shouldn't lenders be able to step things up a bit?

    And trying to link this with the Wonga situation is just silly. This isn't even in the same league.
  • elliebellieelliebellie Forumite
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    corbyboy wrote: »
    MSE seem desperate to present this as the latest "scandal."

    These letters are not just sent to everybody who owes money. They are sent to people who refuse to engage with lenders and ignore multiple letters. If people are struggling to repay they need to get in touch with the bank and sort things out. If people refuse this then why shouldn't lenders be able to step things up a bit?

    And trying to link this with the Wonga situation is just silly. This isn't even in the same league.

    Not quite true, as I have received letters from DG solicitors throughout the term of my repayment to HSBC, confirming payment arrangements etc etc. They have been my point of contact for a good few years now. When I realised I was in financial difficulties I contacted all my creditors and set up payment plans, it was part way through my repayment plan that I was advised by HSBC that DG solicitors would now be my point of contact.

    Please don't assume everyone who gets into financial trouble has ignored letter after letter, it isn't always the case.
  • Not quite true, as I have received letters from DG solicitors throughout the term of my repayment to HSBC, confirming payment arrangements etc etc. They have been my point of contact for a good few years now. When I realised I was in financial difficulties I contacted all my creditors and set up payment plans, it was part way through my repayment plan that I was advised by HSBC that DG solicitors would now be my point of contact.

    Please don't assume everyone who gets into financial trouble has ignored letter after letter, it isn't always the case.

    It isn't always the case however in your circumstance it seems that you were perhaps paying below the monthly contracted amount so your arrears were increasing each month. There comes a point in any debt strategy that once it reaches a certain point i.e. 3 or 6 monthly payments in arrears that the debt will be passed on either to an internal or external dca. .

    Going back many, many years these 'in house' dca's didn't exist. At the specific time that the arrears tipped over the 'point' the debts were passed out to external dca's. Due to this 'escalation' in action borrowers often started to pay or at least come to an arrangement whereas previously they hadn't bothered to contact the bank. Banks realised they could set up their own dca's and start to get the borrowers paying before they actually sent them on to the external dca's and therefore save themselves the fees.

    As someone else commented, people are trying very hard to make this a scandal when it really isn't. I can see that if people persist in trying to stop this process then the fees the bank pay will increase - who's going to fund this.............

    Much like the bank charge debacle, only one loser in this 'righteous' crusade and it won't be the banks.
  • Clive_WoodyClive_Woody Forumite
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    MSE_Paloma wrote: »
    dubious 'legal' tactics to get people to pay debts"

    Dubious!

    Presumably it is not illegal to have your own inhouse legal team rather than paying an outside firm?

    Is it dubious because debtors would most likely carry on ignoring the letters if they knew it were an inhouse legal team?
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
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