The former regulator of the payday sector, the Office of Fair Trading (OFT), met with the City of London Police in 2012 to consider whether the matter should be progressed beyond the OFT’s own investigation and referred to the National Policing Lead for Fraud.
The City of London Police has decided that there is not enough evidence to progress a criminal investigation passing the responsibility back to the OFT.
The letters were sent to customers between October 2008 and November 2010. Wonga wrote to borrowers in arrears using the names Chainey, D’Amato & Shannon and Barker and Lowe Legal Recoveries.
This led 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 Chainey, D’Amato & Shannon nor Barker & Lowe existed and Wonga was using this tactic to maximise collections by piling the pressure on customers.
In April 2014, the OFT closed and the Financial Conduct Authority (FCA), which had taken on the regulatory responsibility regarding consumer credit, entered into discussions with Wonga and secured compensation for the customers affected.
The lender was faced with a £2.6m redress bill to compensate around 45,000 customers who were subject misleading debt collecting practices.
The latest customer update on Wonga’s website reads: “All customers affected by the historical debt collection issue have now been contacted by us, and the majority have already received details of their compensation.
“We are working hard to send a compensation offer to all remaining affected customers by the end of February 2015.”