Week 26: Villain – Wonga

by Jackie_South on June 29, 2014

villain_2_iconThis week, our panel gives loan sharks money-lenders Wonga our Villain of the Week award

This week, it was revealed that Wonga had sent out 45,000 threatening letters to customers in the name of the non-existent law firms Chainey D’Amato & Shannon and Barker & Lowe Legal Recoveries.

45,000: that’s the population of Burton upon Trent, Canterbury, Stirling or Wrexham. That’s a hell of a lot of people.

The Financial Conduct Authority(FCA)  has ordered them to pay these people back a total of £2.6m – which might sound a fair bit until you realise that it is only £58 each, and that Wonga makes that amount in profit every two days. The FCA said Wonga had been guilty of “unfair and misleading debt collection practices”, but could not fine them beyond the compensation award due to a loophole regarding the timing of the offence.

Wonga were clearly just taking the piss – they just used the names of some of their staff in the fictitious law firm names. Perhaps that should not be surprising for a company that charges over 5,000% APR on its loans.

This may not be the end of the matter – the police are investigating charges leveled by The Law Society that this amounts to blackmail and deception. They could also be offences under the Solicitors Act 1974 and Legal Services Act 2007.

Let’s hope so. The fact that companies like Wonga have been getting away for so long with such extortionate interest rates, as well as what might be literally extortionate practices to collect on the debt, is a national disgrace.

{ 1 comment… read it below or add one }

Mike Killingworth June 30, 2014 at 10:49 am

If I were a news editor, I’d be asking my staff to hunt out the MPs they have on their payroll, too.

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