Wonga avoids criminal charges over misleading Debt Collection


The UK’s largest ‘payday’ lender Wonga, has suprisingly avoided criminal prosecution over its ‘unfair and misleading’ debt collection practices.

A full scale investigation conducted by the Office of Fair Trading, and then progressed forward by the FCA, Wonga was alleged to have falsely sent letters to customers in default, pertaining to be from bona fide law firms advising of impending legal action.

In many instances, Wonga levied charges on to customers’ accounts to allow for the administration fees involved in sending the letters.

In a statement released today, the City of London police “concluded there is not sufficient evidence to progress a criminal investigation” which is quite bizarre given the findings of the OFT and the FCA.

The ‘offences’, which took occurred between October 2008 and November 2010, saw Wonga, and its associated companies within their group, use inappropriate and misleading debt collection practices to deliberately place its customers under severe pressure to immediately pay sums of money they could not afford.

It is reported that Wonga sent letters to customers in arrears under the trading names of “Chainey, D’Amato & Shannon” and “Barker and Lowe Legal Recoveries”, falsely causing customers to believe that their account had been passed to a law firm, or other third party Debt Collection Agency. The threat of legal action was given if the debt was not repaid.

The fact of the matter was that neither Chainey D’Amato & Shannon nor Barker & Lowe existed and Wonga adopted this tactic in an attempt to collect the money as quickly as possible by significantly increasing the pressure on customers.

In June 2014, the lender made an agreement with the FCA to pay over £2.6m in compensation to 45,000 customers which would suggest an admission of guilt in itself.

A City of London police spokesperson has said:

“In 2012, the Office of Fair Trading met with the City of London Police to consider the OFT investigation into a specific case involving Wonga’s debt collection practices and to decide whether the matter should be referred to the National Policing Lead for Fraud. The decision taken was that the most appropriate course of action was for the OFT to continue with its own investigation – the interests of the consumer being at the fore.

“In April 2014 the OFT closed and the Financial Conduct Authority, which had taken on the regulatory responsibility regarding consumer credit, entered into discussions with Wonga and secured compensation for the customers affected. Once this matter was concluded the City of London Police agreed it was in the interests of the public to review further material that had been obtained both during the FCA discussions and after the original OFT referral in 2012; to assess whether a criminal investigation was now viable.

“The central allegations were that Wonga had deceived its customers by sending letters falsely purporting to be from lawyers with the aim of recovering outstanding debts from customers. After a thorough review of all the material gathered the City of London Police has concluded there is not sufficient evidence to progress a criminal investigation.”


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