Student Loans Company Forced to Suspend Misleading Debt Recovery Letters
4th Jul 2014
In a similar turn of events to the recent Wonga scandal, the Student Loans Company (SLC) has had to suspend their use of letters headed with the name of a debt recovery firm which is actually a trading name belonging to the SLC.
The letters being sent out, totalling more than 300 000, were seemingly from an agency called ‘Smith Lawson & Company Recovery Services’, and the wrongful impression given was that this was a separate debt collection company.
The SLC has started developing new letters, which remove misleading information, such as references to the Student Loans Company as ‘our client’, and ensure the statement that the debt recovery firm is a trading name of the SLC is more visible.
In March, it has since been found, the Student Loans Company was the subject of an investigation by the Office of Fair Trading reviewing the correspondence.
The SLC’s statement enforced the message that the Student Loans Company ‘has a duty to collect every pound that is owed, for the taxpayer’, and that the Smith Lawson firm was only put into place for customers who had ‘persistently defaulted on their loan repayments and were in arrears for a minimum of three months’.
Questions have been raised regarding the similarities between this case, and Wonga’s, who could now be facing a criminal investigation. Should the SLC be facing a criminal investigation, as effectively they have committed the same crime? Or does the fact that the SLC is collecting money that belongs to the taxpayer, not the company, change perspectives?
The Student Loans Company is a non-profit company based in the United Kingdom that provides student loans and grants for students attending universities and colleges in the UK. It is entirely funded by the government, and is responsible for both the provision of loans and the collection of loan repayments, alongside HM Revenue and Customs.