MSE News: Wonga to pay £2.6m after threatening borrowers with fake lawyers

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  • fermi
    fermi Posts: 40,546
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    beamerguy wrote: »
    BUT there is nothing on that link that refers to anything you have said

    Seems to be an "anonymous" comment on page 2 of the readers comments.
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  • BillJones
    BillJones Posts: 2,187 Forumite
    Perhaps if payday lenders need to resort to these sort of tactics to get people to pay then it's time for them to shut up shop.

    I think it'd be a better state of affairs if these loans weren't available, and people had to live within their means. Clearly there are just far too many people who'll take the money now with no thought about what happens next month.
  • beamerguy
    beamerguy Posts: 17,587
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    You must read this article
    Pressure on police to probe Wonga's multi-millionaire founder over role in decision to send bogus legal letters to thousands of customers

    http://www.dailymail.co.uk/news/article-2671586/Pressure-police-probe-Wongas-multi-millionaire-founder-role-decision-send-bogus-legal-letters-thousands-customers.html

    Conservative MP for the Cities of London and Westminster, Mark Field, said there appear to be grounds for urgent police action.

    Labour MP John Mann has called for the Treasury Select Committee to investigate the payday loan industry and the apparent inability of City watchdogs to fine Wonga for historic offences.

    Labour has been keen to play up the fact that a major donor to the Conservative party also holds a huge stake in Wonga, which is said to be worth more than £380million.

    Adrian Beecroft, who has donated more than £500,000 to the Conservatives since 2006, is also the chairman of Dawn Capital, which has made a fortune from investing in Wonga.

    Labour MP, Andy Sawford, suggested the only way to make Wonga suffer would be to apply the same interest rates it uses for customers to the £2.6million the company has been told to repay.

    Using this calculation, he suggested the company would have to hand back £203 trillion.

    Speaking during the weekly Commons business statement, Mr Sawford said: ‘Can we have emergency legislation on compensation and compound interest to make Wonga pay out not £2.6 million compensation for unfair practice but at their own outrageous interest rates of 5,853per cent, make them pay £203 trillion?

    ‘Perhaps then they would understand the misery they cause?’

    here is also the Administration of Justice Act, which make it a crime to harass debtors, as well as the Fraud Act and the Theft Act.

    Marc Gander of the Consumer Action Group said: ‘Clearly there are a very large number of victims. Each one has been mugged by Wonga.

    ‘It seems to me that no-one – not the OFT, the Financial Services Authority, not the FCA or the police have focussed on the effect upon the victims and the sheer scale of what has gone on.‘

    WATCH THIS SPACE ?:T:rotfl:
  • fermi
    fermi Posts: 40,546
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  • beamerguy
    beamerguy Posts: 17,587
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    Due to the interest rates charged by wonga (5000% plus)
    they are ordered to repay £2.6 million which seems to be about £55 per person affected, will mean nothing to Wonga.

    There is no reason why a Wonga customer receiving this meager payment cannot claim it as being part payment by applying 5000% APR interest and the balance still owed.
  • BillJones
    BillJones Posts: 2,187 Forumite
    beamerguy wrote: »
    There is no reason why a Wonga customer receiving this meager payment cannot claim it as being part payment by applying 5000% APR interest and the balance still owed.

    Wonga never agreed to those terms, and you can't unilaterally impose them.

    While Wonga have done wrong here, we also should not forget that these letters went out to people who were not paying back what they had agreed to. I've not checked the details, but do hope that they will be offset against anything that the customers underpaid before cash is sent out. It's wrong if someone ends up ahead through defaulting on a deal.
  • I'm not sure if this has been mentioned before, but here goes... at about the same time Wonga were being investigated by the OFT in 2011 for sending the fake solicitor letters, the OFT were also investigating a logbook lender and they successfully took away their consumer credit licence. For exactly the same thing. Why didn't the OFT do the same and why has it taken 3 years for this to come to light?

    Also, if Wonga overcharged customers doesn't this mean that the credit agreements they used on those accounts are invalid and shouldn't they have to repay everything the customer paid, Capital, Interest and any charges?
  • beamerguy
    beamerguy Posts: 17,587
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    BillJones wrote: »
    Wonga never agreed to those terms, and you can't unilaterally impose them.

    While Wonga have done wrong here, we also should not forget that these letters went out to people who were not paying back what they had agreed to. I've not checked the details, but do hope that they will be offset against anything that the customers underpaid before cash is sent out. It's wrong if someone ends up ahead through defaulting on a deal.

    I would very much doubt that their terms & conditions at the time this happened would make any reference to customers charging Wonga inflated interest rates

    Wonga customers surely did not agree to being harassed by fake letters either.

    This is not about WHY these letters were sent out to various people, we all know these people owed money, this is about harassment and lies by Wonga
  • beamerguy
    beamerguy Posts: 17,587
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    Lazgoat wrote: »
    I'm not sure if this has been mentioned before, but here goes... at about the same time Wonga were being investigated by the OFT in 2011 for sending the fake solicitor letters, the OFT were also investigating a logbook lender and they successfully took away their consumer credit licence. For exactly the same thing. Why didn't the OFT do the same and why has it taken 3 years for this to come to light?

    Also, if Wonga overcharged customers doesn't this mean that the credit agreements they used on those accounts are invalid and shouldn't they have to repay everything the customer paid, Capital, Interest and any charges?

    You have made a very valid point, trouble is the OFT proved itself useless when backing the consumer, the banking fraud that went on is a prime example. There are many "Why's" to answer and maybe your answer lies here
    http://www.dailymail.co.uk/news/article-2671586/Pressure-police-probe-Wongas-multi-millionaire-founder-role-decision-send-bogus-legal-letters-thousands-customers.html

    Adrian Beecroft, defunct Chairman of Wonga, who has donated more than £500,000 to the Conservatives since 2006, is also the chairman of Dawn Capital, which has made a fortune from investing in Wonga.
  • fermi
    fermi Posts: 40,546
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    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
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