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FCA refers Wonga case to the police

The Financial Conduct Authority said that it has referred Wonga to the police to assess whether the payday lender had committed a criminal offence by sending letters from fake law firms in order to pressurise their customers into paying back loans.

ITV News Business Editor Joel Hills reports:

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It is illegal to impersonate a solicitor. @thefca confirms has referred Wonga's case to police to assess if legal action should follow.

More: Wonga to pay compensation for 'misleading practices'

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Stella Creasy: Wonga's sorry isn't good enough

Labour MP Stella Creasy, a fierce campaigner against payday lenders, said that Wonga's apology over its misleading practices "isn't good enough."

Shadow Minister for Competition and Consumer Affairs Stella Creasy MP has campaigned against the payday loan industry.
Shadow Minister for Competition and Consumer Affairs Stella Creasy MP has campaigned against the payday loan industry. Credit: PA

She said: “Today's news that Wonga were sending fake solicitor letters to cash strapped customers who couldn't afford their fees to frighten them - and charging them for these - is further proof of the need for Britain to rid itself of these legal loan sharks.

"It is also deeply concerning the Government regulators have known about this issue since 2011 but it has taken so long for any action, and that despite these behaviours being potentially a criminal matter under the Administration of Justice Act the police do not seem to be involved.

"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 when they admit to flouting the laws on harassing debtors - saying sorry four years later just isn't good enough."

More: Wonga to pay compensation for 'misleading practices'

CoE: Wonga ruling shows need for lending alternatives

A Church of England spokeswoman, commenting today on the FCA ruling that Wonga had engaged in "unfair and misleading debt collection practices" said:

We welcome anything that clamps down on aggressive or irresponsible debt collection practices, and not just by payday lenders.

This highlights the need for more responsible alternatives to payday lending and other forms of high cost credit.

That is why the archbishop's task group is developing a set of practical initiatives to meet the need for more affordable and responsible lending and saving opportunities.

More: Wonga to pay compensation for 'misleading practices'

CoE 'welcomes aggressive debt collection clampdown'

The Church of England, which has indirect investment in payday lender Wonga, said that it "welcomes anything that clamps down on aggressive or irresponsible debt collection".

ITV News Business Editor Joel Hills reports:

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Church of England "welcomes anything that clamps down on aggressive or irresponsible debt collection". CoE has indirect investment in Wonga

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Wonga is a private company but Church of England has "less than £100,000" invested via private equity investment trust.

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Church estimates cost of getting rid of its "exposure" to Wonga immediately at between £3 million and £9 million.

Watch: Justin Welby: 'We got things wrong' over Wonga investment

Wonga to pay £50 to every recipient of fake legal letter

Wonga has said that each individual who received a letter claiming to be from a fictitious law firm will be given £50 compensation "for the upset this might have caused them".

The firm said that it had worked with a regulator and a "third party expert" to come up with the compensation figure.

Any Wonga customers who received a letter from from fake law firms Barker & Lowe or Chainey, D'Amato and Shannon between 2008 and 2010 have been advised to claim their compensation through the firm's website or by calling the freephone number 0800 840 0836.

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Wonga implicates ex-employees in fake law firms row

Wonga has blamed the creation of fictitious law firms used in its correspondence with customers on a number of previous employees, ITV News Editor Jess Brammar has learned:

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Wonga tell us fake legal letters "relate to practise that has abstly no place in our biz today so we don't feel relevant to publish them"

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Amazing. Wonga tell us the fake law firms' names were "from a number of employees at the firm at the time". They weren't aware of use.

More: Wonga to pay compensation for 'misleading practices'

Wonga apologises 'unreservedly' for failings

Payday lender Wonga has apologised "unreservedly" for the failings which took place between October 2008 and November 2010 after agreeing to pay £2.6 million in compensation to 45,000 customers.

Consumers were put under "great pressure" from letters sent by fictitious law firms to make loan repayments that many could not afford, city regulator FCA said.

Wonga "threatened" customers with letters from "non-existent law firms". Credit: PA

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."

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