Law Society calls for criminal probe into Wonga following £2.6m FCA fine
The Law Society has asked the Metropolitan Police to launch a criminal investigation into Wonga, after the payday loans company was fined £2.6m for sending letters from fictional law firms, threatening legal action.
June 27, 2014 at 07:42 AM
2 minute read
The Law Society has asked the Metropolitan Police to launch a criminal investigation into Wonga, after the payday loans company was fined £2.6m for sending letters from fictional law firm.
On Wednesday (25 June), the Financial Conduct Authority (FCA) slapped Wonga with the fine for sending letters to customers in arrears, from non-existent law firms "Chainey D'Amato & Shannon" and "Barker and Lowe Legal Recoveries".
The FCA found Wonga had used the "tactic to maximise collections by piling the pressure" and threatening legal action against 45,000 customers between October 2008 and November 2010.
Now, the Law Society is calling on the police to assess whether Wonga has committed any criminal offences, and asked the Solicitors Regulation Authority to examine whether an offence has been committed under the Legal Services Act 2007.
"It seems that the intention behind Wonga's dishonest activity was to make customers believe that their outstanding debt had been passed to a genuine law firm," said Law Society chief executive Desmond Hudson (pictured).
"It looks like they also wanted customers to believe that court action undertaken by a genuine law firm would follow if the debt was not repaid.
Depending on the precise circumstances of what has happened, that could amount to blackmail and deception, as well as offences under the Solicitors Act 1974 and Legal Services Act 2007."
Hudson has called on the FCA to provide the police with information about Wonga's activities, including copies of the letters sent to customers, and its investigation files.
At the time of writing, Wonga had not responded to a Legal Week inquiry on whether the company would provide customers and the public with a full list of law firms it currently works with.
In 2011, a year after the letters were sent to customers, Wonga hired legacy Herbert Smith's former European alliance relationship partner Henry Raine as its regulatory head.
In the same year, the company hired Kemp Little's Lucy Vernall as its first general counsel.
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