Wonga's finally been caught out - and it's a corker

The critics are finally having their day: the payday lender has agreed to pay 2.6 million pounds in compensation after it was caught using fake lawyers to chase debts.

by Emma Haslett
Last Updated: 14 Jul 2014

As one of the UK's most heavily scrutinised companies, it's hardly surprising that payday lender Wonga has finally been caught doing something naughty. Although the extent of its naughtiness suggests the company's management is either very brave, or just not very clever.

To wit: this morning the Financial Conduct Authority published details of a £2.6m fine Wonga has agreed to pay to 45,000 customers after it was discovered using made-up lawyers to chase debts. Oh, and because of technology glitches it made 200,000 people pay more than they owed, too.

We can't help but think Wonga missed a trick: instead of giving its made-up lawyers intimidating names like 'Stern McNasty QC' (which MT would totally have gone with), it went with the relatively benign - but nonetheless fictional - 'Barker and Lowe' and 'Chainey, D'Amato and Shannon'. Where's the creativity in those?

Apparently the company 'voluntarily' stopped the practice in November 2010, having been at it since October 2008. The FCA said it discovered what Wonga had been up to in 2011 when the lender was forced to provide the government with information about its debt collection practices.

It hasn't been an easy few months for Wonga, whose remaining founder and chairman Errol Damelin stepped down on Friday, just three weeks after chief executive Niall Wass quit. So it was interim chief exec Tim Weller who responded to the FCA's statement today, apologising 'unreservedly' for Wonga's 'unacceptable' behaviour.

'We fully accept the impact on customers was negative in many cases and our priority is to ensure we deal quickly and fairly with customers who've been impacted,' he added. Well, yes, obviously. Doesn't bode well for the embattled firm, though.

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