45,000 customers of pay day lenders, Wonga, are due compensation, because in an attempt to maximise debt collections, they were sent letters purporting to be from a bona fide firm of solicitors. This was not only a real lack of customer care, but a case of “serious misconduct", according to the financial regulators. The real truth of the matter was that Wonga sent these missives from law firms that did not exist and, in some cases, they charged their customers fees for the letters they sent and added the money onto their customer’s accounts. The company whose slogan is “straight talking money”, has apologised for using such a tactic which in effect was to pressurise people into paying back their loans. They have also said that they stopped doing this over four years ago, which is fortunate for them as the Financial Conduct Authority or FCA, who have highlighted this serious misconduct, were not responsible for the regulation of the payday loan industry until 2014.
Police reconsidering whether to open up a criminal investigation
Last night yet another advert popped up featuring the digital characters of Earl and the two dear old ladies, trying to drum up interest in using the services of Wonga, to help pay for the necessities in life until payday arrives. The only interest that should be taken of this company is the whopping 365% p.a noted on the front page of their website. Directly underneath is their unreserved apology for their actions between October 2008 and November 2010, when they sent out fake letters to customers behind in their payments, in order to pile on the pressure. Having noted that on Wednesday, there seemed to be no action taken against Wonga, it was reported today that the City of London Police are considering opening up a criminal investigation into the company.
Affected consumers could be entitled to around £50 compensation
Earlier on the police had decided to allow the FCA to get on with their investigation and indeed the FCA were keen to set up a compensation scheme for those affected by these fake solicitor letters. It did seem to be a little surprising that a business could get away with such a tactic as Wonga used, but now the police are re-considering their approach. The compensation averages out to around £50 per customer affected, but no amount of money can compensate for sleepless nights, days of worry and stress at the thought of legal prosecution. Some may say that if a person chooses to use a payday lender then they should take whatever consequences come their way and pay the price. However, they still need to be treated in a fair and equable manner, so it will be interesting to hear what the police finally decide to do.
If you are one of those consumers who have been faced with a letter from a non-existent solicitor, then get in touch and tell us your experience – we’re listening!