Graduates harassed by fake Wonga-style student loan repayment letters
Thousands of grads threatened by fictional debt collectors
The Student Loans Company has been accused of using fake debt-collectors letters to harass thousands of graduates who are behind on their repayments.
Last week, payday loan company Wonga was rocked by a false letters scandal. And now, the official SLC have now been accused of using Wonga-style tactics to intimidate students, reports The Daily Mail.
The SLC even allegedly invented a fictional firm, known as Smith Lawson and Company Recovery Services as part of the hoax – and has sent thousands of threatening letters to graduates over the past nine years demanding repayment.
The warning letters sent by “Smith Lawson and Company” are designed to intimidate graduates, and are emblazoned with a red banner which reads: “DO NOT IGNORE THIS LETTER.”
The bogus letters give the impression that they are from a separate debt-collection agency to Student Loans Company, and read: “We are instructed by our client, in connection with the sum outstanding shown above”.
They even include a fictional postal address, email address and telephone number.
“Smith Lawson and Company” then go on to demand payment within seven days and include a threat of legal action.
The letters from the non-existent debt recovery service use the same threatening language that private debt collectors and solicitors use to chase overdue payments.
The SLC have hit back at the accusations, saying the Smith Lawson pseudonym was introduced as a “cost-saving exercise”, as conventional debt collection agencies require payment of commission.
But there is evidence that SLC has been sending warning letters under the fake Smith Lawson name since 2005 – meaning that up to tens of thousands of graduates will have been affected by the phony scheme.
Deborah McDonnells a recent University of Ulster graduate, is one of the thousands affected. After graduating last summer she received a letter at Christmas from the fictional “Smith Lawson Company” demanding payment by April this year.
She said: “It basically said they had reviewed my situation and that I had to start making payments in April.
“I ignored the letter and rang student finance right away because I did freak out and I knew that I wouldn’t be expected to make payments at that time.
“Student finance confirmed I wasn’t meeting the salary threshold to start paying it back. They just said to ignore it but didn’t seem to be investigating it further.
“It was on headed paper and looked really official. It really is the last thing you expect when you graduate.”
And now, this shock revelation, coupled with Wonga’s phoney repayment letters, have triggered calls for a police inquiry into misrepresentation and harassment on the part of SLC.
The Office of Fair Trading have now ordered The Student Loans Company to change the misleading wording in the letters. The SLC now claim that the most recent letters do not claim to “for a client.”
The bullying approach was outlined in the training manual for the fake Smith Lawson Company, which advised staff to use “the threat of legal action” and the threat of a debt collector calling to speak to the student personally.
Currently, graduates only have to start paying back their student loan once they earn over £21,000 at a rate of 9% of their income.
Back in April The Tab reported that up to 3/4 of all graduates will never pay their loans back.
The total amount owed by all students ballooned to £54.4billion in 2013/14 following the introduction of £9,000-a-year tuition fees in 2012. At the same time, the arrears soared from £12.7million to £38.2million.