Socialist Worker

Fake law firms threat letters go much wider than Wonga

Issue No. 2410

Payday loan giant Wonga was hit with a £2.6 million bill for sending customers threatening letters from fake law firms.

But loads of other companies are using the same scam to intimidate people.

The Student Loans Company is using Wonga tactics to harass thousands of graduates who are behind on their repayments.

It invented a fictional firm—Smith Lawson and Company Recovery Services—which adopts threatening language  to chase payments.

Wonga sent tough arm debt collection letters from two made up law firms between October 2008 and November 2010.

It then charged customers an administration fee for sending them out.

The fake law firms —Chainey D’Amato & Shannon and Barker and Lowe Legal Recoveries—included the names of Wonga workers.

Some of them were unaware their names were being used. Wonga has apologised and agreed with industry regulator the Financial Conduct Authority to pay the £2.6 million compensation to the 45,000 customers sent letters.

Yet it came as Wonga admitted a second blunder which had seen around 200,000 customers overcharged.

It said the majority of those affected overpaid by less than £5, although an even greater number had underpaid.

It has now agreed to refund money to the 200,000 customers. But  they refused to reveal what the total bill would be, or when the error first occurred.

Wonga charges a 5,853 percent annual percentage rate on its loans.

But industry rules mean it will only have to add 8 percent annual interest on to the money it repays.

The student Loan Company said it introduced Smith Lawson as a “cost-saving exercise” because the use of conventional debt collection agencies required payment of commission.

Troublemaker can reveal that energy companies and high street banks all use the fake solicitor letters.

If you believe you’ve had a letter from a fake lawyer or law firm get in touch email reports@socialistworker.co.uk

A working class Tory is something to be

In what is presumably some sort of Monty Python tribute act, working class Tories have been recalling their youthful deprivation.

There are 14 “working class Tories” featured in the “Party of Opportunity” campaign.

The organiser David Amess’ account of his own working-class roots states, “I was born in the East End of London. 

“We had no bathroom, a tin bath used to hang on the wall outside, an outside toilet, and a scrubbing board, not a washing machine. 

“We didn’t have a telephone, we just threw the window open and shouted loudly. ”

And Yorkshire Tory MP Alec Shelbrooke was at pains to stress, “I used to be up at 5am to do the papers in WH Smith before college”. He rambled on, “and got up at 4am to sweep a factory floor while doing my degree.”

The campaign was supposed to be launched at the party conference but has been postponed because there aren’t enough working class Tories.


Consultants rake in cash despite cuts

Spending with corporate outsourcing companies has jumped 23 percent in two years. A report by the Institute for Government shows that such spending rose from £1.02 billion in January 2012 to

£1.25 billion in December. The top companies in the queue for your cash are Capita £803 million and Serco £445 million.

Some of their sucesses include the time when the Department for Work and Pensions had to send its staff to help Capita send payments to disabled people. 

This was after the firm was incapable of processing them in time.

Serco was also overcharging the Ministry of Justice for prisoner tagging for eight years—including for people that were dead.

And to top it off Serco mis-reported its out-of-hours GP services in Cornwall—but still received bonus payments.


Counting the cost of special advisors

Hacking crook Andy Coulson was a special advisor. Not all of them are crooks but there are plenty of them.

Labour had 74 special advisers in the last government. Cameron and Nick Clegg said they’d cut the number.

They increased them to 98.

The total pay bill for special advisers now exceeds £7.2 million a year.


Comfy cushion for cash boss Cobbold

De la Rue, the company with a licence to print money, gave its recently departed chief executive, Tim Cobbold, a comfortable exit cushion.

The banknote printer’s 2014 annual report shows that Cobbold’s total remuneration for the year was £1.07 million—almost double last year’s £631,000 pay package.


Taxing question for prince Charles

Prince Charles receives £19.5 million from the Duchy of Cornwall.

His travel and other costs are paid for from the Sovereign Grant and government departments —not the Duchy. 

This comes to another £2.1 million. He “voluntarily” pays income tax on the Duchy cash, though. 

Such income “is taxed to the extent it is not used to meet official expenditure.”

Can you guess who decides what counts as “official expenditure”?

Prince Charles—and  his 124 people employed to run his bath and file his tax returns.


Cameron lines up top job for Eton friend

David Cameron is lining up a plum diplomatic job for the old school friend who works as his £140,000-a-year Chief of Staff.

Ed Llewellyn has been promised a key ambassadorship—with Rome currently top of  the list—after the 2015 election as a “thank you” for his loyalty.


Know your enemy No. 567286 - richest Tory MP Richard Benyon

  • He said households were wasting money by throwing away “enormous amounts of food” and needed “careful fridge management”. 
  • Benyon is a director of Englefield Estate, which owns 20,000 acres of land. The estate received hundreds of thousands of pounds of housing benefit–despite the MP attacking the “something for nothing” welfare state.
  • Up to 90 households in east London fear Benyon’s plan to charge “market rents” will treble their bills.

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Article information

The Troublemaker
Tue 1 Jul 2014, 18:12 BST
Issue No. 2410
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