Wonga - disgraceful practices...

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The Esk

The Esk

Player Valuation: £70m
I thought today's news that Wonga have previously written to up to 45,000 customers in arrears, fictitiously purporting to be law firms chasing collection is disgraceful.

Britain's best-known payday lender, Wonga, has been ordered to pay more than £2.6m compensation after it was found to have sent threatening letters to customers from non-existent law firms.

The Financial Conduct Authority (FCA) said Wonga had been guilty of "unfair and misleading debt collection practices". It said the firm would be compensating around 45,000 customers.

However, the firm escaped a potential financial penalty or worse because the FCA only started policing payday lenders in April 2014, and these practices occurred while the now-defunct Office of Fair Trading (OFT) was in charge.

Between October 2008 and November 2010, Wonga sent letters to customers in arrears under the names Chainey, D'Amato & Shannon and Barker and Lowe Legal Recoveries – leading customers to believe that their outstanding debt had been passed to a law firm or another third party. Further legal action was threatened if the debt was not repaid.

In fact, said the regulator, neither Chainey D'Amato & Shannon nor Barker & Lowe existed, Wonga was using this tactic "to maximise collections by piling the pressure on customers".
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http://www.theguardian.com/money/2014/jun/25/wonga-compensation-bill-unfair-misleading-practices

The bigger question is why there are no prosecutions for fraud? Totally scandalous!
 


If you owe you owe, not sure there's a huge moral dilemma here in terms of the chase letters

The entire sector is scummy as hell though and was directly responsible for the changes in legislation across the finance spectrum via the FCA. Yet more knee jerk political thought process leading to virtually unworkable practices for the 95% of the retail finance sector who operate legally and honourably
 

A lot of companies use a bogus company to collect there debts. This might be the start of a big compo claim trend.
I hope the companies take the money that they are owed from the compensation they give out.
 
Well, you learn something every day - all companies have bad debts, my own company included, but I'd never think of using a false company to chase the debts.

I'm strictly in the "if you don't pay, straight to court we go" camp, not sure how I would feel about consumers though, given I only have trade debtors.
 
So correct me if I am wrong here, Someone has borrowed money from a loan firm failed to pay it back and is now receiving compo because a fake letter was sent out trying to obtain the money they were legally owed
 
Del said:
So correct me if I am wrong here, Someone has borrowed money from a loan firm failed to pay it back and is now receiving compo because a fake letter was sent out trying to obtain the money they were legally owed
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I have no problem with companies legitimately chasing legitimate bad debts - the question is should you use fake letters to do so?

(The answer is of course not)
 

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