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* Treasury committee says practice 'very concerning'
* Letters appear to come from independent solicitors
LONDON, July 16 (Reuters) - Letters sent by Lloyds BankingGroup to debtors that appeared to come from independentlawyers were "calculated to mislead", the chairman ofparliament's Treasury Select Committee said on Wednesday.
In a letter to the committee's chairman Andrew Tyrie, LloydsChief Executive Antonio Horta-Osorio acknowledged the bank hadissued debt collection letters under the name Sechiari Clark &Mitchell, or SCM Solicitors, since the late 1980s. He said adecision had been made this year to stop the practice.
The letters were actually sent to customers by the bank'sin-house litigation department.
Tyrie said evidence from Lloyds, which included an exampleof one of the letters, was very concerning.
"The sample letter seemed calculated to mislead. Lloydsfailed to convince us that this was not the case, or to provideany satisfactory explanation as to why it issued letters in thisform, but at least this practice has been brought to an end,"Tyrie said.
The sample 'SCM' letter submitted by Lloyds began by saying"We are solicitors for Lloyds Bank and act for them".
"I agree that could be misleading, that particular clause,"Tim Hinton, managing director of Lloyds'small-and-medium-enterprises banking division told the committeeon Wednesday.
Committee member Pat McFadden replied: "I think if I asked100 people what that meant 99 out of 100 would say that was(from) somebody outside of the bank".
Lloyds' actions came to light after payday lender Wonga wasordered by Britain's financial regulator to pay 2.6 millionpounds in compensation to customers after sending them bogusletters from non-existent law firms.
The Treasury Select Committee, which oversees the work ofBritain's finance ministry, was taking evidence as part of aninquiry into small business lending. (Reporting by Matt Scuffham, editing by David Evans)
