|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    25th of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

Loan News feed Loan News

All Financial News feed All Financial News

OFT warns Wonga over debt collection methods

Bookmark and Share

by Jan Harris
OFT warns Wonga over debt collection methods

Payday loan company Wonga used aggressive and misleading methods to collect debts from customers, the Office of Fair Trading (OFT) has found.

Wonga sent letter and emails to certain customers suggesting they had committed fraud and threatening to report them to the police if they did not act in the way Wonga suggested.

The company also made the allegations in phone calls to the customers.

Customers contacted in this way had either claimed money back from Wonga by reversing a card payment made to the payday lender, or had entered into debt management plans.

The OFT said that this behaviour was aggressive and misleading and warned the company that it would be fined up to £50,000 if it used similar business practices in the future.

David Fisher of the OFT said: “I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers.”

Wonga is appealing against the OFT’s decision and said a few letters accusing customers of dishonesty had been sent more than 18 months ago to customers genuinely suspected of dishonest conduct but these letters were no longer used.

It also said that the phone calls were made using a script that was withdrawn in January 2010.

In a statement, Wonga said: “Wonga has put in place procedures to ensure these communications cannot be repeated and it has provided assurances to the OFT to that effect.

“In particular, current fraud processes ensure cases of suspected fraud are always referred to an in-house team of experienced professionals and suspicions that a customer may have acted fraudulently are not communicated to the customer.”

In related news, the Citizens Advice Bureau was criticised yesterday after its Medway branch revealed Wonga had provided it with funding to carry out a survey about peoples’ employment, income and debt.

Dan McDonald, the chief executive of Medway CAB, said: “On the surface this may seem an unusual partnership, bearing in mind that Medway CAB has been at the forefront of the campaign to highlight the risks associated with payday loan lenders.

“However, our knowledge and experience leads us to believe that there is a great deal more work needed to understand the issues and the challenges associated with the costs of day-to-day living.

“I have had a number of open and frank discussions with Wonga and have been impressed by their commitment to this independent inquiry.”

Discuss this in the Finance Markets forums

Story link: OFT warns Wonga over debt collection methods

News posted: May 22, 2012

Financial Services:

Related financial stories to: OFT warns Wonga over debt collection methods:
Previous: «
Next: »

Visited 3094 times, 1 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Tags: , , , ,