General Chat

Should Wonga & its Directors be prosecuted, I ask this because they have been using non existent firms of solicitors to try and collect loan payments. Impersonating a solicitor has been a long-standing criminal offence and anyone found guilty of this can face a hefty fine and/or imprisonment, and several people have been jailed in the past for this.

The City watchdog, the Financial Conduct Authority (FCA) found that Wonga sent letters to customers from fake law firms called "Chainey, D'Amato & Shannon" and "Barker and Lowe Legal Recoveries" - Wonga has been ordered by the FCA to pay pay £2.6m in compensation to those affected - let's face it that amount is peanuts to Wonga.

The letters threatened legal action, but the law firms were false. In some cases Wonga added fees for these letters to customers' accounts.

The plan was to make customers in arrears believe that their outstanding debt had been passed to a law firm, with legal action threatened if the debt was not paid.

The Law states that if any act is done by a body corporate, or by any director, officer or servant of a body corporate, and is of such a nature or is done in such a manner as to be calculated to imply that the body corporate is qualified or recognised by law as qualified to act as a solicitor:-

(a)the body corporate shall be guilty of an offence, and

(b)in the case of an act done by a director, officer or servant of the body corporate, they also shall be guilty of an offence

If you or I pretended to be a solicitor we would have been arrested - so why has Wonga not been prosecuted? :-|

short answer 'yes'.

According to the BBC,

As this happened before the FCA took over the regulation of payday lenders, it is unable to fine Wonga. It also said there would be no criminal investigation as it wanted to set up a compensation scheme as quickly as possible >>and a criminal probe would take time<<. Affected customers will receive about £50 each.
http://www.bbc.co.uk/news/business-28015456

The article doesn't actually rule out a prosecution, but if it did go to court the Judge may decide that the compensation scheme was a good enough punishment.

Longer answer yes, yes and yes again . What a dreadful thing they did, and they are still in business, disgusting

I do not think that, because this happened before the FCA took over the regulation of payday lenders, has any relevance - a criminal offence was committed and this should have been investigated by the police and their finding passed to the Crown Prosecution Service.

Or is this just another example of a two tier criminal prosecution system - one for Joe Public and one for everybody else.

Definitely your last comment OFITG.

Compensation will be too late for some people.

I hope they lose custom and go out of buisness,but still the desperate will put cash in their pot,,,,,,,they should be made to cease trading.........£50 per customer,thats a joke,!

What they have done is not only illegal but lown down and despicable.

They should be closed down and sent back to the US, where they have had sanctions made against them for their crooked ways! Following hefty fines here in the UK.

Read in the paper that one of their appalling fake letters went to a woman who had missed her payment because she was in hospital following a miscarriage!

I consider myself very luck that I have never had to use any form of financial help at any time in my life. But have known family members who have got into a terrible state.

My neice got into a bit of a state with her finances, thanks to my advice (to call her mum immediately and I would go down straight away) and a good look at her and her husbands finances, myself and her parents were able to clear a couple of their smaller debts asap and then help them to set out a budget to fit their finances. This was about 6 years ago. I made her cut up her credit cards, phone the credit card company, in front of me to cancel the accounts and make arrangement to pay the debt in x amount in monthly instalments. They are now financially secure and I know they will never get into this state again, it terrified her!

Dear One Foot

Hello

Yes, of course they should be prosecuted.

But there are underlying issues about this matter.

Because of the changes in benefits, low wages, and rising prices, people are turning to loan companies, whose actions are thoroughly unscrupulous.

Years ago, people used the pawn shop.

An old fashioned idea, but if people were paid their benefits and wages
every two weeks, these would ease pressure a little.

Growing up in the East End was very tough, but we always had enough to eat
and pay the rent. There was enough for a few treats too.

It is extremely disturbing that in this modern era, that many people are reliant on food banks because of severe poverty.


Take gentle care
With best wishes
Elizabeth,
xx

Elizabethofseasons - on the subject of poverty, the Secretary of State for Work and PensionsIain Duncan Smith claimed recently that his campaign of welfare cuts and voluntary work schemes would end child poverty in six years.

He said “Despite tough economic times over the last few years, we’ve introduced reforms to the welfare system that are transforming the lives of the most vulnerable in our society,”

The question is - is he transforming peoples lives for the better or the worse :-S

Elizabeth makes a good point about pawn shops, at least if you had pawned your Sunday best and could not meet the payments they kept the suit and your debt was cleared.

I find the rates of interest charged my these companies awful, but to be fair they are lending to people who will have a very high default rate.

Stopping it would be fairly easy, a return to years ago when credit was hard to get, I remember that if I borrowed to buy a car they would only lend a % of the price and the cheque was made out to the company you were buying the car from.

The trouble is that if you remove these lenders, the loan sharks will be back to take up the slack. The threat of prosecution by a none existent solicitor is preferable to having your legs broken!

A secured loan on possessions (not a home) would be a better solution, it might mean the wide-screen TV goes, or the X box but at least the debt can be cleared.

Pop Goes the Weasel