Wonga to pay more than £2.6m in compensation to customers

Newcastle United sponsor Wonga is to pay more than £2.6 million in compensation to around 45,000 customers for “unfair and misleading debt collection practices”, the City regulator has announced.

The UK’s biggest payday lender was found to have sent letters to customers in arrears from non-existent law firms threatening legal action, the Financial Conduct Authority (FCA) said.

In some cases Wonga added charges to customers’ accounts to cover administration fees for sending the letters.

Wonga, which struck a controversial four-year sponsorship deal with Newcastle United in October 2012, apologised “unreservedly” for the failings, which took place between October 2008 and November 2010.

The FCA said consumers were put under “great pressure” from communications sent by fictitious law firms to make loan repayments that many could not afford.

Wonga contacted 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 other third party. Further legal action was threatened if the debt was not repaid.

Neither of these firms existed and Wonga was using this tactic to maximise collections by piling the pressure on customers, the regulator said.

Tim Weller, interim Wonga CEO, said: “We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result.

“The practice was unacceptable and we voluntarily ceased it nearly four years ago.”

Source – Newcastle Evening Chronicle,  25 June 2014

One comment

  1. Methusalada

    Good news about Wonga having to reimburse some of its destitute clients. However something appears to be missing apart from the guilty apologizing by using with the word “sorry ” again .To me the word “sorry” is not enough & the perpetrators who crime who continue to use this criminalized word as an apology now has extended into Parliament including the PM . An appropriate goal sentence would have perhaps ease my disappointment or even the dissolution of the company & a ban on it’s Directors or Ministers from holding public office. It seems to myself that justice is not quiet what it claims to be in service for it’s people . These days the criminals are given mercy and the victims are left in torment to recover from their mental anguish if they are able.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s