The Solicitors Regulation Authority (SRA) has warned in-house legal departments against sending misleading letters to debtors that wrongly give the impression an external law firm has been instructed to take action to pursue the debt.
Richard Collins, SRA executive director, says: “We believe such approaches do not meet the requirements of the Code of Conduct.”
However, NLJ consultant editor David Greene, a partner at Edwin Coe, says: “That’s all very well in the event that there are in-house solicitors.
“The problem arises when there are not in-house solicitors, as is very often the case. Unfortunately the SRA here is dealing with a small part of the problem. Many debt collectors fake up letters to make them look like solicitors letters or make up forms of demand as though they are issued by a court.”
The action follows a scandal at loans company Wonga, where misleading letters falsely purporting to be from non-existent independent firms of solicitors were sent to debtors. Wonga has been ordered by the Financial Conduct Authority to pay £2.6m compensation.
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