The Legal Implications of Fake Debt Letters

Wonga, one of the biggest UK payday loan companies, was recently found sending fake legal letters to customers to chase up debts. We therefore thought we’d tell our readers about the legal implications in-house solicitors face if caught sending fake debt letters.

Wonga wasn’t the only company found sending the fake legal letters, as Lloyds Banks was also found guilty of the crime – that’s right, we said crime, because that’s what it is.

Wonga

Any solicitor worth their practising certificate should know that Section 21 of the Solicitors Act 1974 makes it an offence for an unqualified person to act as a solicitor – so any firm pretending to be a soliciting firm is committing a legal offence. However, if a solicitor is found guilty of misconduct, the consequences could be a lot more drastic.

Many of the pseudo-firms that were employed by banks were reportedly trade names of their in-house legal teams – meaning qualified solicitors were involved. However, the correspondence their customers received gave the impression that the letter was written by an independent firm. If the letters were written by qualified in-house solicitors, they would face serious repercussions from the SRA, as investigations would be launched, and could result in a lawyer maybe removed from the practising roll.

Anyone suffering from debt should contact StepChange for help and support, or they can opt for a debt management plan for a more affordable monthly debt repayment plan. Anyone who believes they have received a fake debt letter can report it to the Financial Conduct Authority.

Legal Firm Closed Following Suspected Dishonesty

Legal regulators have closed a Manchester law firm and suspended two solicitors following a fitness to practise probe.

The Solicitors Regulation Authority (SRA) reportedly intervened to protect clients’ interests, as well as money in the public interest. The partners practising has therefore been suspended and, as a result, they are barred from practising as a solicitor during the investigation.

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The reason for the intervention is due to suspected dishonesty on the part of one of the partners. According to the SRA, both solicitors has failed to comply with rules in sections of the Solicitors Act 1974, in relation to accountancy and financial matters, as well as fitness to practise.

A spokesperson for the SRA commented: “We stop the firm from operating, take possession of all documents and papers held by the firm, including clients’ papers, and take possession of all money held by the firm, including clients’ money. We are not responsible towards employees or trade creditors of firms that we have intervened in”.

The disciplinary proceedings may be sanctioned by the SRA, if agreed by the independent adjudicators, or they could face a large fine. The solicitors may also be removed from the practising roll.

Scottish Solicitors to Receive ID Cards

The Law Society of Scotland has recently announced that all Scottish solicitors in their jurisdiction will be required to carry a professional identity card from 2015.

Each ID card, which expires after six years, will offer a digital signature from the solicitor, and will therefore replace the current practising certificate. The new ID cards will come into effect from November 2015, and will allow solicitors to sign contracts and documents electronically.

Solicitors

The ID cards will also ensure courts and prisons are confident that the solicitor is a qualified advisor. The introduction of the identity card is a response to European legislation, which may soon require professionals to carry valid ID cards.

The Scottish Society recently commented: “The company we are working with has already deployed this solution to over 50 sets of professionals and bar associations across Europe over the last few years, and some of these organisations have a membership ten times the size of the Society’s. We know this solution works for them, and we are confident it will work for us”.

Members will receive a letter within the next few weeks detailing the plans, and anyone who does not hold a card will be unable to obtain a practising certificate from November 2015.

Lloyds Bank Defend Solicitor Debt Collection Letters

Lloyds Bank has defended sending solicitor debt collection letters to their customers, as the stated their goal is to focus their customers’ minds on their debt problems.

It is the first bank to respond to the request from Andrew Tyrie, MP, who is the chair of the Treasury select committee, and encouraging the big four high street banks to issue letters to customers warning of potential financial difficulties they could face in the future.

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The banks soliciting letters are sent under the name Sechiari Clark & Mitchell (SCM)Solicitors, who describe Lloyds Bank as “our client”, and state that “We are solicitors for Lloyds Banks plc and act for them in relation to the above matter”.

Antonio Horta-Osorio of Lloyds Bank commented: “It is in both our and the customer’s interests to engage and address the financial difficulty at the earliest moment. However, we recognise that transparency is now a priority”.

People struggling with debt are therefore advised to seek help immediately, as there are plethora of financial services out there, such as professional debt management companies and charitable debt support.

Firm Raises £1,300 for MacMillan Cancer Support

macmillanThomas LLP Solicitors has raised a fantastic £1,300 for MacMillan Cancer Support, as the firm’s staff, as well as their family and friends, embarked on a walk from Bromsgrove to Worcester.

30 people took part in the charitable event, which followed the route from Bromsgrove railway station, down the canal towpaths, all the way to Thomas Horton’s office in Worcester.

The walk was in aid of a colleague who had been enduring cancer, and was the reason why Tina Circus came up with the event to raise money for the charity. Ms Circus stated: “We decided that between us we wanted to both recognise her strength and determination, as well as raise funds for the local MacMillan nurses, based at the Alexandra Hospital in Redditch, which is giving her so much support”.

The donation will most definitely benefit the MacMillan nurses, who each day endeavour to make cancer sufferers’ lives as easy and painless as possible.

NHS Defies Law By Denying Vital Operations to Pensioners

14In October 2013, the conservative government introduced age discrimination laws to prevent age discrimination within the health sector. However, the Royal College of Surgeons has recently warned that elderly patients are unfortunately being denied life-saving operations due to their age.

According to reports, most people over the age of 75-years-old are not offered breast cancer or routine operations, including knee operations of gall bladder removal. Health Secretary Jeremy Hunt recently commented on the problem, stating the discrimination is both “unacceptable and illegal”.

It also appears that the level of healthcare provided maybe a postcode lottery, as a pensioner is more likely to be offered an operation based on their location.

Professor Norman Williams, the president of the Royal College of Surgeons, has stated: “There are large discrepancies – really huge. It is impossible to prove the reasons behind all the variation, but we have our suspicions and I worry about discrimination. It is really worrying when you look at something like colorectal cancer and there is a six fold difference between different parts of the country after the age of 65 – when we know surgery is the best for of treatment”.

Health officials are now aiming to tackle the variations in pensioner care, ensuring that the NHS adhere to legal health practices.

Wonga Fined £2.5m for Fake Law Firm Letters

14Wonga, the UK’s biggest payday lender, has been fined £2.6m in compensation by the Financial Conduct Authority (FCA), as it was discovered that the loan company had sent out threatening letters to customers from fake law firms.

The FCA commented that Wonga had implemented “unfair and misleading debt collection practices”, and that they had used old and existing employee names in the letters to create the fake law firms. The compensation will therefore be divided between the 45,000 customers who were sent the letters over their outstanding debt repayments.

Those affected by the letters will receive either cash or have their outstanding balance reduced. Customers can also rest assured that they will receive compensation, as the FCA has appointed a “skilled person” to oversee the compensation payments to ensure people receive the cash they are entitled to.

In addition to sending the letters, Wonga also added administration charges to cover the “legal” costs of the letters. The non-existent law firms were called Chainey D’Amato & Shannon, and Barker & Lowe. The Office of Fair Trading uncovered the use of the fake names back in 2011, as Wonga was ordered to disclose information about its debt practices.

 

Who to Contact Following the Office of Fair Trading Closure

Office of Fair Trading logoThe Office of Fair Trading was a government organisation that was responsible for protecting consumer interests in the UK. However, it was subject to heavy criticism for ineffective investigations that often led to little to no action. As a result, the organisation closed on 1st April 2014, and was merged with the Competition and Markets Authority.

Who to Contact

The closure of the Office of Fair Trading has resulted in different organisations receiving new responsibilities. The OFT merger with the Competitions and Markets Authority ensures they are solely responsible for the competition law enforcement and merger control.

While many were concerned that the closure of the OFT would result in a lack of consumer protection, the Local Authority Trading Standards Services will now focus on enforcing consumer law protection.

The Financial Conduct Authority will also now have anti-money laundering powers and responsibilities in relation to consumer credit financial institutions, in addition to becoming the consumer credit regulator. However, HMRC is now the supervisor of estate agency businesses under the Money Laundering Regulations 2007.

The separation of responsibilities will therefore ensure that each organisation can investigate different issues to the best of their ability, offering a more efficient and reliable service.

For further assistance with fair trading issues, we recommend contacting the Citizen’s Advice Bureau who can offer helpful advice and support.

Protecting consumer interests can be anything from a small dispute, to a large one that results in the customer being massively out of pocket and in debt.

How Legal Aid Cuts are Affecting Vulnerable People

14The UK legal system is based on one system: every single person is equal before the law. At least that’s what we thought, anyway. However, the conservative government has introduced legal aid cuts that will affect those who need help the most.

For those of you who don’t know much about legal aid, it is a free service that helps people who are facing problems with welfare benefit, debt issues and housing and social welfare difficulties. Legal aid offers expert advice to those who otherwise wouldn’t be able to afford it.

Many Citizen Advice Bureaus have been forced to close following cuts to civil legal aid in 2011, with many more facing the threat of closure. As a result, many vulnerable people will now have nowhere to turn when faced with financial troubles, leading to increased debt or legal issues.

It is believed that £600 million of the 2010 legal aid budget of £2.1 billion will have been cut by 2015. It is no surprise that many solicitors, barristers, judges, legal advisors and campaigners got onboard with the London Legal Walk, which is a walking event that took place on 18th May.

Thousands of participants travelled from the Royal Courts of Justice to Hyde Park to raise money to support legal aid charities across London and the South East.

Scottish Solicitors Pressurising Home Buyers

14According to new reports, many Scottish solicitors are placing unfair pressure on borrowers, often resulting in scaremongering tactics to home sale missives. It is believed that many legal firms have made a conscious effort to ignore the new mortgage rules that were introduced in April, which speeds up the application process. However, firms are deliberately adding pressure on their clients to push through missives.

Mortgage experts have criticised the firms who are failing to get onboard with the new mortgage market rules, with Alison Mitchell, a mortgage expert at Edinburgh IFA Robson Macintosh, commenting: “they are seriously putting clients at risk by scaremongering in order to sign missives within ten days of the offer, when the fastest time to offer is 17 working days at the moment”.

“Solicitors need to back off and work with advisors and brokers because they are meant to be acting in the borrower’s best interest. How allowing missives to be signed with the means to buy the property is in the borrower’s interest is beyond me.”

As a result, she is encouraging solicitor firms to take responsibility for their actions within the market to take the pressure off borrowers.