Consumer campaigners are urging the regulator to investigate concerns that c ustomers of major banks have been sent Wonga-style letters chasing them for payments.
Customers of Lloyds, Halifax, Royal Bank of Scotland (RBS), NatWest, Ulster Bank, Barclaycard and HSBC received letters which were from either lawyers or debt collectors which were actually brands operating within these respective banking groups.
Banks said it was made clear in these letters that the firms sending them were based in-house. But concerns have been raised that, as in the case of payday lender Wonga, some people may still have wrongly got the impression that the debt had been escalated to an outside third party, making them feel under pressure to pay up.
Banks said they have since stopped using the different brand names altogether or are phasing them out. It also emerged that some utility firms have also chased debts using the names of different brands based within their companies.
A key distinction between the letters sent on behalf of the banks and utility firms and those from Wonga is that the letters involving banks and utility companies were from real organisations, while the Wonga letters were from firms which did not exist.
Citizens Advice wants the Financial Conduct Authority (FCA) to consider whether, like in Wonga's case, people who have received such letters should get compensation, and Which? said the regulator should delve further into exactly how banks communicate with customers who owe them money.
Andrew Tyrie, chairman of the Treasury Committee, also voiced concerns, saying: " Customers should know who they are dealing with - it seems they may not have done. I will be writing to the banks for clarification."
The FCA said it is aware of reports about the incidents and it wants to hear from anyone who has further information about this type of practice.
A furore erupted last week when it emerged that Wonga had sent fake legal letters to customers. The payday lender is paying a total of £2.6 million in compensation after sending the correspondence to around 45,000 people.
The City of London Police are currently looking again at the incident involving Wonga to see if further action is needed. It also recently emerged that the Student Loans Company has, in the past, sent out letters which were feared to be potentially "misleading".
Richard Lloyd, Which? executive director, said: "Banks have a duty to treat customers struggling with debt fairly and provide clear and up-front information. These practices seem to be designed to put pressure on people and the FCA should now investigate how banks communicate with customers who owe money.
"Consumer trust in the banking sector is very low and to address this, we need to see a big change in how banks operate so they work for customers, not bankers."
Citizens Advice chief executive Gillian Guy said: "It can be very distressing and intimidating for people in debt to receive letters from debt collectors. Debt collection letters must be clear about who the actual letter is from, what the debt is for and how borrowers can get independent advice if they need it.
"The FCA needs to carefully examine cases where debt collection processes aren't clear and consider whether compensation for customers is appropriate."
Customers of RBS Group, which includes Royal Bank of Scotland, NatWest and Ulster Bank, received letters from law firm Green & Co and debt collection company Triton, which were both in-house. It is understood that these firms' links to RBS were stated in the letters. Green & Co has not taken any new business since 2012 and a decision was taken earlier this year to phase out the Triton brand.
A spokeswoman for RBS said: "Our customers should never be in any doubt about who they are communicating with. We have reviewed our policies in this area and will stop the use of any solicitor or debt collection brand names in correspondence with our customers that could cause confusion."
A Barclaycard spokesman confirmed Mercers Debt Collections Limited had previously managed some collections work on behalf of Barclaycard. He said all debt collections are now carried out under the Barclaycard name, following a decision taken in April.
The spokesman said of Mercers Debt Collections: "I t was made clear to customers that they were a company within the Barclays Group and collecting on our behalf.
"Mercers Debt Collections Limited was set up to manage more serious arrears and is in the process of being wound down. The employees have transferred to handling these accounts under the Barclaycard name instead."
Lloyds has used Sechiari, Clarke and Mitchell (SCM) Solicitors, which has been part of the group since the 1980s. Its sister banks, Halifax and Bank of Scotland, used an in-house debt recovery firm, Blair, Oliver and Scott (BOS), which was formed in the 1990s.
It is understood that it was made clear in the more recent letters from these two firms that they were operating under the Lloyds umbrella, although due to the historic nature of the letters it is not possible to say if this was the case for every single piece of correspondence ever sent out.
A Lloyds Banking Group spokeswoman said: "We continue to simplify our business to ensure that we support our customers in the most simple, straightforward and transparent ways possible.
"As part of the simplification of our collections and recoveries operation BOS ceased operating in November 2013 and from earlier this year we made the decision to phase out the use of SCM."
HSBC used DG Solicitors, an in-house legal firm which is now closed. It said all its letters were compliant with debt recovery rules and made it clear that they were from HSBC's in-house firm of solicitors and that its people were HSBC employees.
It continued: "HSBC stopped using its legal firm DG Solicitors in January 2014 and legal correspondence to these customers is now under the HSBC brand."
Asked about the calls for further investigation into how debts are recovered, the FCA said in a statement: "The FCA is unable to comment on the activities of individual firms, but we are aware of these reports.
"We would request that anybody who has further information about this type of practice passes it onto the FCA."
Anglian Water, which supplies families in the East of England, also said today that it has previously used the name Frontier to contact "hard to reach" customers who had chosen not to pay their bills, but it stopped using this name of its own volition last year.
It said that it was always made clear in correspondence that Frontier was a trading name of Anglian Water and it now uses independent agencies to reach customers who have not paid their water bill and not contacted it to ask for support.
The Daily Mail quoted retired building firm owner Peter Killan, 73, who said he received a "threatening" letter from what he believed to be a debt collection firm after receiving a bill from ScottishPower. After reading the correspondence more closely, he realised the letter was sent from the energy company itself.
Mr Killan, from Saddleworth in the Manchester area, told the newspaper: "The wording of it was quite threatening. They're trying to frighten people."
A spokesman for ScottishPower said: "Sterling Collections is a part of Scottish Power's debt recovery process. All customer communications referencing Sterling Collections clearly state that 'Sterling Collections is a trading name of ScottishPower Energy Retail Ltd'.
"ScottishPower is currently undertaking a review of its debt recovery channels including Sterling Collections."
The Solicitors Regulation Authority (SRA), which is the regulator of the Law Society of England and Wales, said it is planning new guidance for in-house solicitors.
Richard Collins, SRA executive director, said: "We will shortly be issuing guidance for in-house solicitors on our existing requirement that publicity must not be misleading.
"This will make it clear that they cannot use forms of words that give the impression that they are an independent law firm and not employed solicitors."