Anorak News | The Government’s Smith Lawson and Company Student Loan Scam: Who’s Wonga Now?

The Government’s Smith Lawson and Company Student Loan Scam: Who’s Wonga Now?

by | 30th, June 2014

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YOU’LL recall that Wonga just got into very hot water over sending threatening letters to people who had not repaid their loans. The problem was that they made the letters look like they came from solicitors of debt collectors: but they were in fact just run off on the company’s own printers using a few names cobbled together.

They didn’t actually say they were from solicitors: it just looked very like it. So, Wonga’s had to pay a couple of million in fines and agree that they’ve been very naughty. The problem is we now find out that the government itself has been doing exactly the same thing:

Warnings sent by ‘Smith Lawson and Company’ to graduates for the last nine years carry a banner in red stating ‘Do Not Ignore This Letter’, with a demand for payment within seven days and a threat of legal action.

They gave the impression of a separate company with the line: ‘We are instructed by our client, in connection with the sum outstanding shown above.’

But the supposed firm does not exist and is little more than a masthead designed to intimidate.

The Student Loans Company (SLC) is a subsidiary of the Government and reports to Vince Cable’s Department for Business, Innovation and Skills.

The firm said it introduced Smith Lawson as a ‘cost-saving exercise’ because the use of conventional debt collection agencies required payment of commission.

Last week City watchdog the Financial Conduct Authority (FCA) revealed Wonga would have to pay £2.6million compensation to 45,000 people sent letters from two invented debt recovery firms.

Now it’s true that sometimes the government gets to do things that we’re not allowed to do. You know the sort of thing: the government is allowed to give us a gun and tell us to go off and kill foreigners. We’d be in pretty hot water if we tried that privately.

But this isn’t one of the things that they can do and we cannot do. Either Wonga needs to be let off those fines or the government itself must be prosecuted for doing exactly the same thing.

You#d have to have a heart of stone not to laugh about this.

Posted: 30th, June 2014 | In: Money Comment (1) | TrackBack | Permalink