The Solicitors Regulation Authority has received complaints about individual in-house solicitors accused of involvement in sending letters purporting to be from independent law firms, as more banks admitted adopting the practice.
The regulator declined to say whether it will investigate, despite warning in July that in-house solicitors misleading customers in this way would breach the Code of Conduct.
Questions have been raised about the role of in-house legal teams in creating the letters since the Gazette revealed in June that Lloyds Bank had sent letters to indebted customers under the name ‘SCM Solicitors’ – which turned out to be an in-house firm.
In letters to the House of Commons Treasury Select Committee, HSBC and RBS acknowledged they had also adopted this practice for debt recovery. Barclays and Santander said they had previously undertaken in-house debt collection activity under separate brands.
The practice of sending letters purportedly from a firm of solicitors came to light earlier this year when payday lender Wonga agreed to pay compensation to recipients of the letters. City of London Police is continuing to investigate this.
Andrew Tyrie MP, chairman of the committee, said the letters seem to have been designed to ‘pull the wool over consumers’ eyes’.
He added: ‘From these responses it seems that this practice was widespread. Banks say that they have now stopped sending such correspondence but it should never have happened.’
In letters published by the committee, RBS chief executive Ross McEwan said the bank had established an in-house firm called Green & Co and an in-house debt collection agency named Triton Credit Services. The practice was stopped earlier this year.
Alan Keir, chief executive of HSBC, said the bank made use of an in-house firm called DG Solicitors. It was established in March 2001 and registered with the Law Society and latterly the SRA until HSBC chose to close it in February this year.