Between October 2008 and November 2010, Wonga sent letters to arrears entitled « Chainey, D`Amato & Shannon » and « Barker and Lowe Legal Collections », in which he frightened clients that their debts were in the hands of a law firm. Neither company existed. Wonga will not be prosecuted, despite sending intimidation letters from fake law firms to threaten 45,000 clients in arrears with refunds, police said today. Wonga has already apologised « unreservedly », saying the 45,000 clients who received correspondence from fake law firms will be proactively contacted and offered a lump sum of £50 for distress and inconvenience, and administrative fees for forged letters will also be refunded. Depending on individual circumstances, additional compensation may also be paid. Payday lender Wonga has to pay £2.6 million in compensation after sending letters from non-existent law firms to overdue clients. Wonga is still processing compensation for customers who have received letters, but all payments are expected to have been made by April. « Why in cases where Wonga`s customers have charged a collection fee for these letters, isn`t it a police matter? » she asked on social media site Twitter. In fact, neither Chainey D`Amato & Shannon nor Barker & Lowe existed. Wonga uses this tactic « to maximize [its] collections by unfairly increasing pressure on customers, » he added.
In some cases, Wonga has also added fees to clients` accounts to cover the administrative costs associated with sending the letters. It is a criminal offence for anyone to call themselves a lawyer or act as a lawyer if they are not, but it is believed that letters and emails from fake companies do not use the word lawyer. It was discovered that Wonga had sent 45,000 threatening letters from non-existent law firms to clients. The use of fake law firms was denounced by the OFT in 2011 after Wonga was asked to disclose information about its collection practices. The company said that « everyone directly involved in these practices is no longer in business and has not been here for some time. » It turned out that some of the names used to launch the fake law firms « at the time were people who were in business. In some cases, they are still in the company, but they have no responsibility. Details of fake legal letters sent by Britain`s best-known payday lender, Wonga, have been handed over to police for a possible criminal investigation after the town`s watchdog revealed it had ordered the company to pay more than £2.6 million in compensation. This is not the first time the company has encountered problems due to its debt collection activities. In 2012, the OFT asked him to put his house in order after sending letters to clients accusing him of fraud. Among Wonga`s victims, who were threatened by the fake legal team, was a woman who had not been reimbursed because she was recovering from a miscarriage in hospital.
The police said: « The main allegations were that Wonga had deceived his clients by sending falsely claiming letters to come from lawyers with the aim of collecting clients` outstanding debts. The letters threatened legal action, but the law firms were fake. In some cases, Wonga has added fees for these letters to customers` accounts. Wonga, the payday lender, is not facing criminal investigation for deceiving customers by sending fake legal letters to track the debt. The forged letters were sent under the names « Chainey, D`Amato and Shannon » and « Barker and Lowe Legal Collections » to clients, none of whom existed. Wonga`s problems came shortly after boss Niall Wass stepped down after six months as chief executive. M. Wass joined Wonga in January 2013 as COO – after the fake lawyer`s tactics ended – and became managing director in November. Martin Lewis, founder of consumer website MoneySavingExpert.com, said he welcomed the measures taken, adding: « Using lawyers as fake as their puppets, and then having the courage to pay people for it, is a brutal tactic to scare and intimidate people who are already struggling. » The FCA ordered Wonga to offer the 45,000 customers a lump sum of £50 for distress and inconvenience and to reimburse those who had paid the legal costs, estimated at £400,000. Wonga has previously stated that the « few » people who were directly involved in sending the letters are no longer in business. Between October 2008 and November 2010, Wonga sent 45,000 letters to overdue clients under the names Chainey D`Amato & Shannon and Barker & Lowe Legal Recoveries, with the aim of « maximising [their] recoveries by unfairly increasing pressure on clients », according to the Financial Conduct Authority.
An investigation revealed that Wonga had sent letters to clients of fake law firms called « Chainey, D`Amato & Shannon » and « Barker and Lowe Legal Recoveries ». Between October 2008 and November 2010, Wonga sent letters to clients in arrears under the names Chainey D`Amato & Shannon and Barker & Lowe Legal Collections – leading clients to believe that their outstanding debts had been passed on to a law firm or other third party. Lawsuits were threatened if the debt was not repaid. The messages were usually titled « Urgent Message » and began: « We have been instructed by Wonga to collect a debt of £X from you… In relation to threatening correspondence, there will be a lump sum settlement offer of £50 for the 44,556 customers who sent letters to reflect the hardships and inconveniences they have experienced. Some also receive a refund of the costs incurred for the transfer to Barker & Lowe or Chainey D`Amato. LONDON (Reuters) – Britain`s largest payday lender, Wonga, will pay 45,000 customers £2.6 million in compensation after sending them fake letters from non-existent law firms threatening legal action. Further legal action was threatened if the debt was not repaid. These companies did not exist and Wonga used this tactic to increase pressure on customers to pay, the FCA said. Police ruled out a criminal investigation against Wonga because the payday loan company used fake legal letters to track debts.