Partly Cloudy

Partly Cloudy

max temp: 15°C

min temp: 9°C

ESTD 1874 Search

Finance: Wonga to pay £2.6m in compensation over ‘unfair’ debt collection tactics

12:45 25 June 2014

Online payday loans company Wonga is to pay compensation over unfair debt collection methods.

Online payday loans company Wonga is to pay compensation over unfair debt collection methods.

Payday lender Wonga is to pay more than £2.6million 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 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.”

Mike O’Connor, chief executive of StepChange Debt Charity, said: “For too long payday lenders have subjected consumers to unfair, misleading and distressing practices and today’s announcement represents a victory for a small number of those consumers.

“It’s time the payday loan industry entered the 21st Century in terms of treating customers fairly. If they cannot, they should leave the market, or be pushed out of it.

“I hope this will be the first of many similar actions as the FCA continues its efforts to clean up the payday lending industry and create a short term credit market that meets consumers’ needs, but crucially treats those in financial difficulty fairly.”



Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Suffolk Yacht Harbour is celebrating the launch of its new workshop

An independent marina on the River Orwell is celebrating a major expansion.

Peter Osborne, General Manager, Brudenell Hotel, Aldeburgh.

A privately-owned hotel on Aldeburgh seafront is celebrating after it was awarded a coveted AA Silver Star Award for 2015.

Delegates from the ABP Marine Conference at ABP, Old Custom House, Port of Ipswich.

Some of best marine minds in the country were in Ipswich this week as harbour masters, dock masters and marine managers gathered for an annual conference.

DFS is celebrating record results.

Sofa chain DFS Furniture has hailed a record set of results as Britain’s buoyant housing market and growing consumer confidence boosted sales.

The Bank of England Monetary Policy Committee is expected to keep interest rates at 0.5%.

The Bank of England is expected to keep interest rates on hold today amid mounting concern over a slowdown in the economy.

Owner and head chef of Sweet P's, Pierre Rollins.

Soul food restaurant Sweet P’s is due to reopen next week after a devastating kitchen fire six months ago.

The new board members at employee-owned social enterprise Leadiing Lives who were elected at its AGM.

More than 50 jobs have been saved in Suffolk and north-west Essex following the closure of care support charity Crossroads Care East Anglia.

The Great House in Lavenham has been awarded three rossetts from the AA. Left to right, Martine and Regis Crepy, Enrique Bilbault, Swann Auffray, David Castro, Guillavme Dericq.

An award-winning Suffolk restaurant has officially been recognised as one of the best in the country.

George Bradley of Suffolk Secrets.

The belated arrival of settled weather in mid-September has helped to deliver an “Indian Summer” boost for Suffolk Secrets, one of the county’s leading holiday lets businesses.

Some of SABMiller's beer brands.

Brewing giant Anheuser-Busch InBev today unveiled another improved offer for rival SAB Miller.

Most read

Most commented

Topic pages