Lloyds set to escape redress bill over legal letters to borrowers

 
Tim Wallace
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LLOYDS is unlikely to have to compensate customers for sending letters from an in-house law firm, it emerged yesterday.

Payday lender Wonga had to hand more than £40 to each customers when it sent debt-collection letters from fictional law firms.

Lloyds has been criticised for sending letters from in-house lawyers to chase up debts from non-paying customers.

But it used the name of a law firm that did exist and was registered with the Law Society, but that was run by the bank.

As a result, it is less likely to have to pay customers any compensation.

“This practice appears to be much more widespread than it first appeared, and occurred across industries, not just in financial services,” Financial Conduct Authority boss Martin Wheatley said yesterday. “We will have to look at each individual circumstance – it varies from fictitious law firms to internal solicitors, so we have to judge each case on its merits.”

Meanwhile South African regulators found that Wonga had failed properly to check borrowers’ ability to repay loans, and ordered the firm to remove adverse credit ratings scores which were incurred as a result.