Is it Wonga not to use a Solicitor?
Wonga, the UK’s biggest payday lender, has been found to have sent letters “appearing” to be from law firms. Letters threatening legal action were sent to 45,000 of their customers who were in arrears. The law firms named as “Chainey, D’Amato and Shannon” and “Barker and Lowe Legal Recoveries” were in fact non-existent.
Following an investigation by the Financial Conduct Authority (“FCA”), these letters were found to be mis-leading to Wonga’s customers. The letters led Wonga’s clients to believe that their account had been passed to a law firm to consider commencing legal action. To top it off, Wonga added “administration charges” to their customers accounts to cover the cost of sending these letters! These charges totalled some £400,000 Wonga will pay £2.6 million in compensation to their customers due to their conduct.
Clive Adamson, Director of Supervision at the FCA states;
“Wonga’s misconduct was very serious because it had the effect of exacerbating an already difficult situation for customers in arrears. We are pleased that Wonga has been working with us to put these matters right for its customers and to ensure that these historical practices are truly a thing of the past.”
Whilst Wonga have released an unreserved apology to their customers, and are assisting the FCA with their investigation, this case does stress the importance for a Company to ensure that it is using appropriate and professional debt recovery practices. When it comes to legal action, it is best to leave it to the professionals! Failure to chase your debtors in the correct way can have a huge impact on a Company in terms of cashflow / bad press and reputation. Failure to use the right Solicitor can also mean that you will pay far too much in legal fees for chasing your debts.
We at Breeze and Wyles Solicitors Limited have an award winning and experienced Debt Recovery team who can assist you in collecting your debt fairly and legally! Our fixed-fee low cost debt recovery service, allows your business to chase consumers or businesses cost effectively. For more information on your account opening processes, debt recovery, or to request a debt recovery proposal with details of our service, please contact our Maria Koureas-Jones: Maria.Koureas-Jones@breezeandwyles.co.uk or 01992 558411.