Wonga 3Wonga, a UK based payday lender, has been forced to compensate thousands of customers for sending letters from fictitious law firms demanding they repay their debts.

Wonga agreed to pay at least £2.6m in compensation to 45,000 customers for sending them threatening letters from non-existent law firms “Barker and Lowe” and “Chainey, D’Amato and Shannon”.  It escaped a potential fine because the misconduct occurred before the Financial Conduct Authority started overseeing the sector earlier this year.

Wonga customers were charged £400,000 in “inappropriate fees” for receiving letters from made-up law firms – an average of almost £9 each.   It is the second time in two years that Wonga has been criticized for having poor debt collection practices.  In 2012 the OFT said the lender had sent letters to customers wrongly claiming they might have committed fraud by missing repayments.

This is a shocking case of bad debt collection misconduct casting a dark shadow over the debt collection industry and anybody who is associated with it. 

Source:  Financial Times