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Legal bosses call for Wonga probe
1:30pm Friday 27th June 2014 in Business News
THE Law Society has stepped up pressure for a criminal investigation to be held into Wonga over fake legal letters the payday lender sent to its customers.
The society, which represents about 60,000 solicitors across England and Wales, says it has asked the Metropolitan Police to investigate Wonga and consider whether any offences, such as blackmail or those under the Solicitors Act, have been committed.
It has also called on City regulator the Financial Conduct Authority (FCA) to hand over copies of its investigation.
Wonga will pay £2.6m compensation after chasing struggling customers with letters from non-existent law firms to pressurise them into paying up.
The firm, which is the UK's biggest payday lender and sponsors Newcastle United's shirts, sent such correspondence to about 45,000 customers in arrears threatening legal action.
The case also saw Wonga add charges to some customers' accounts to cover administration fees for sending the letters, from fictitious firms Chainey, D'Amato & Shannon and Barker and Lowe Legal Recoveries.
The FCA could not impose a fine on Wonga for what it described as "unfair and misleading" debt collection practices, which happened between October 2008 and November 2010, because the failings were uncovered by a previous regulatory regime and it does not have powers to issue retrospective penalties.
The FCA confirmed it had been contacted by the Law Society but declined to comment further.
Desmond Hudson, Law Society chief executive, said: "It seems that the intention behind Wonga's dishonest activity was to make customers believe that their outstanding debt had been passed to a genuine law firm.
"It looks like they also wanted customers to believe that court action undertaken by a genuine law firm would follow if the debt was not repaid."