Eight months after first receiving complaints, the Solicitors Regulation Authority has still to decide whether to bring disciplinary action against in-house lawyers involved in writing misleading letters to recover debts.

Last week City of London Police said there was not sufficient evidence to bring criminal charges against payday lender Wonga, which sent debt recovery letters to customers in the names of two fictitious law firms.

After news about Wonga’s practices emerged last July, the SRA received complaints about several companies that were found to have sent letters from firms purporting to be independent solicitors.

The small print revealed that these firms were created and run by the companies themselves, leading to complaints that the in-house solicitors involved had breached the code of conduct.

The SRA this week admitted that it is facing its own challenges in establishing whether any solicitors should face action.

SRA executive director Jane Malcolm said: ‘We are  continuing to look at the issues that were brought to our attention. They are less than straightforward and therefore no decisions have been taken yet.’

Lloyds Bank was found last June to have sent letters to customers under the name ‘SCM Solicitors’ – which turned out to be an in-house firm.

In letters to the Commons Treasury Select Committee, HSBC and RBS acknowledged that they had also adopted this practice for debt recovery. Barclays and Santander said they had previously undertaken in-house debt collection under separate brands.

The SRA subsequently warned in-house solicitors about ‘taking unfair advantage’ of customers’ lack of legal knowledge when pursuing debts.

The Wonga affair was not a matter for the SRA because no solicitors were involved in its ‘law firms’. The payday lender was ordered to pay £2.6m in compensation last summer to around 45,000 customers.