Controversial payday lender, Wonga, has been slammed by the Office of Fair Trading, for falsely accusing some of its customers of fraud and threatening them with action from the police, if they did not pay up.
However, the payday lender has refuted the allegations and said the warning relates to practices it no longer engages in, but insisted it had good reason to act in the way it had.
The OFT has repeatedly issued lenders with guidelines about how it expects them to behave in all communications with customers and has warned that any firm found guilty of aggressive or intimidating practices, will have the book thrown at them.
In this case, Wonga sent letters to customers accusing them of committing fraud after they arranged for their card payments to be reversed. Wonga and other lenders have come under fire in the past for their use of continuous payment authorities, which provides them with authorisation to take money from the customer’s account at any time. These are much more difficult to cancel than a direct debit, but it is possible.
The same fraud allegations were made to customers who entered onto a debt management plan, whilst those employed in roles in either the financial or public sector, were told by Wonga that they were breaking their contracts by being behind with their repayments.
Wonga said it had ‘grounds for suspecting dishonest conduct’ but admitted that the letters were not up to the ‘usual high standard’ which they claim to have. The payday lender said they no longer use the ‘scripts’ in question for either phone calls or letters.
However, despite Wonga’s insistence that the problems are all in the past, the OFT has issued a stern warning and said that they took action to ‘ensure that Wonga does not behave this way again.’
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