The FCA said 45,000 customers of the UK’s biggest payday lender would be compensated after it found that letters threatening legal action from non-existent law firms had been sent to customers, in an attempt to boost collections by increasing the pressure on people in debt. In some cases customers had been charged for the letters.
The practice ended four years ago before the FCA had responsibility for payday lenders and credit, so it does not have powers to fine Wonga. Which? welcomed the tougher line being taken by FCA on irresponsible lending. The FCA stated that it “expects firms to pay particular attention to fair treatment of those who have difficulty in meeting their loan repayments”.