Wonga faces Police investigation over false Debt Collection scam


Further to this weeks earlier revelations, shamed payday firm Wonga, which presents itself as the “straight talking” short term loans company may now face a police investigation into their use of fake legal and debt collection letters.

The Financial Conduct Authority is believed to have referred the matter to the metropolitan police for investigation.

Since the scandal broke, Wonga has agreed to pay the 45,000 victims of its letters compensation, with each individual receiving £50 each plus other costs, total amount believed to be around £2.6m.

Conservative MP for the Cities of London and Westminster Mark Field has led calls  for immediate police action.  “I support this industry, but Wonga isn’t doing itself any favours with this type of sharp practice and it’s a matter of urgency for police attention”

The firm, which has tried to position itself as the premier short term lender in the UK  –  had used names of their staff  (without their knowledge) – to manufacture fake legal and debt recovery firms.

Customers received letters from fabricated companies using spurious names such as Barker and Lowe Legal Recoveries, and Chainey, D’Amato and Shannon between October 2008 to November 2010.

“Wonga’s misconduct was very serious because it had the effect of exacerbating an already difficult situation for customers in arrears,” said Clive Adamson from the Financial Conduct Authority (FCA), which arranged the compensation deal.

Lawyers agreed it could constitute a criminal offence. “If a firm or individuals at the firm pretended to be somebody else seeking to obtain personal information or property belonging to another, there is potential for it to come under fraud by false representation,” said Michael Ruck from Pinsent Masons.

Wonga has come under further criticism from Labour MP Stella Creasey. “Local debt collectors who behaved in this way wouldn’t get off so easily, so we urgently need to know why Wonga isn’t being held to account,” she is quoted as saying.

“We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result,” said the firm’s interim chief Tim Weller.

Wonga said no staff directly involved were still at the lender.

Industry analysts suspect this may well be the last straw for the troubled payday lender and suspect work is already going on behind the scenes to create a new money making vehicle for its high level investors and shareholders.


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