Is It a Real Law Firm? Wonga Saga Reminds us to be on Guard

Is It a Real Law Firm? Wonga Saga Reminds us to be on Guard


Payday loan providers, Wonga recently issued a formal apology to customers in the wake of ‘fake law firm’ revelations. It emerged the company had sent out letters to thousands of customers purporting to be from separate organisations and giving the impression that outstanding debts had been passed on to law firms. In fact, Wonga had itself sent those letters.

The story highlights a number of wider issues for real lawyers. For one thing, it is in solicitors’ best interest to be on their guard against bogus law firms. This involves checking the credentials of firms they come into contact with in the course of dealing with clients (especially where solicitors have not heard of those firms before). It also provides a reminder to solicitors of the need to provide accurate information on letterheads and other materials (including websites) regarding their organisation and the status of individuals within it.

What was the issue with Wonga?

Between 2008 and 2010 more than 40,000 customers in arrears had received letters from “Barker & Lowe” and “Chainey, D’Amato and Shannon”. The impression given was that the debt was now in the hands of lawyers. In reality, the firms did not exist and took the names of Wonga employees.

The Financial Conduct Authority has already concluded these activities amounted to “unfair and misleading debt collection practices”. The Law Society has called on the Metropolitan Police to investigate the matter – including possible cases to answer under the offence of obtaining pecuniary advantage by deception and blackmail as well as possible offences under the Solicitors Act 1974 and the Legal Services Act 2007. In its press release, the Law Society made specific reference to the fact that not only is the misuse of the title ‘solicitor’ a criminal offence, so too is the use of any wrongful description implying that a person is ‘qualified or recognised by law as qualified to act as a solicitor’.

A separate issue on a similar theme involves banks, utilities companies and similar institutions sending letters from in-house legal departments. To clarify matters, the Solicitors Regulation Authority has issued a fresh warning notice reminding companies against giving the misleading impression that a separate organisation has been instructed to take legal action, when in fact the matter is in the hands of the in-house legal team.

Issues for the wider profession

It is of course very easy to check the status of a firm and individual solicitors via the Law Society website. In litigation, property, family and similar matters, most solicitors find themselves dealing with the same third party representatives day in, day out. Where a name arises that they are unfamiliar with, it is advisable to carry out verification checks – including contacting the Law Society or SRA direct where appropriate.

Taking a wide view, this helps to protect the reputation of the profession. More importantly, it protects the interests of clients. In litigation for example, if it turns out the opposing party has chosen unqualified representatives who do not carry solicitors professional indemnity insurance and who are unregulated in their activities, remedying this at an advanced stage can cause unnecessary delay.

Solicitors should also take steps to ensure their house is in order when it comes to the information they provide about their firm. Information on letters, websites, promotional material and emails should make it clear the firm is ‘authorised and regulated by the Solicitors Regulation Authority’. The desired outcome of regulation in this area is to ensure clients and others are able to make informed decisions on whether and under what capacity to instruct the firm.

Areas that deserve special attention include avoiding the inference that certain individuals are ‘Partners’ (or are of similar standing) when they are not – as well as giving the impression clients are dealing with a solicitor when it is a paralegal who has day-to-day conduct of the matter.

Remember; the impression of being ‘misled’ in this area (however innocently) is likely to leave a bitter taste in the mouths of clients.

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