OFT requires Wonga to ensure improved debt collection practices

[sequenci]

http://oft.gov.uk/news-and-updates/press/2012/40-12

 

The OFT has required Wonga.com Limited and some of its associates (Wonga) to ensure that aspects of their debt collection practices are acceptable.

 

The OFT action follows statements made by Wonga to customers in two types of written communications and in the wording of one call script.

 

Without having appropriate justification the letters or emails suggested that customers may have committed fraud and that Wonga would consider contacting the police if customers did not act as Wonga requested.

 

The wording in the call script stated that customers with jobs in the public or financial sectors should not find themselves in debt, and that this was stated in their terms of employment.

 

As a result, the OFT has imposed a requirement on Wonga that its communications must not, without appropriate justification:

 

allege that a customer has, or may have, engaged in criminal conduct or refer to the consequences of such conduct

state that a customer should not be in debt if the customer has a certain employment status or for any other reason.

The letters and emails were sent to customers who had claimed money back from Wonga by asking their card providers to reverse a payment made to the company. They were also sent to some customers who had entered into debt management plans.

 

David Fisher, OFT Director of Consumer Credit, said:

 

'We have acted to ensure that Wonga does not behave this way again. I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers'.

 

The OFT launched an extensive review of the payday lending sector in February. It expects to announce its findings and strategy to raise standards across the sector later this year.

 

NOTES

 

1.The OFT's decisions to impose requirements may be appealed to the First-tier Tribunal (Consumer Credit). Details of all recent OFT actions are on the public register.

2.Download the detailed requirement imposed on:

 

Wonga.com Limited (pdf 43kb)

Samedaycash Limited (pdf 43kb)

Quickbridge (UK) Limited (pdf 43kb)

Wonga Customer Services (Pty) Limited (pdf 44kb)

Wonga International SA (pdf 44kb)

Wonga Technology Limited (pdf 43kb)

3.Under the Consumer Credit Act 1974, where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose requirements on the licensee. Requirements may require a business to do or not to do (or to cease doing) anything specified to address the OFT's dissatisfaction, or securing that matters of the same or similar kind do not arise.

4.Failure to adhere to a requirement can lead to the imposition of a fine of up to £50,000 (per instance) and may, under certain circumstances, indicate that a licensee may not be fit to hold a consumer credit licence.

5.The OFT has issued specific guidance for all businesses engaged in the recovery of consumer credit related debts. The Debt Collection Guidance sets out the standards expected of all business engaging in the activity including creditors, law firms and tracing agents as well as traditional debt collectors.

.

[renegadeimp]

And that folks is why the site always tells you to.. REPORT, REPORT, REPORT. As you can clearly see. It does work!

 

Lets hope wonga does send out more of those letters now, so they can lose their licence and drop all ideas they had about becoming a major financial institution.

[sequenci]

Absolutely.

 

a) Report

b) Don't stoop to their levels when trying to deal with these firms, I've seen some absolutely comedic posts in these forums recently. Try and keep a cool head

[renegadeimp]

Absolutely.

 

a) Report

b) Don't stoop to their levels when trying to deal with these firms, I've seen some absolutely comedic posts in these forums recently. Try and keep a cool head

 

Yep. I've always said and always will say that the MUST be dealt with calmly and professionally. If you are irate, calm down and put your thoughts down clearly but politely. NEVER start calling them "****, theives", or whatever else you think they should be called. I guarantee that it will go against you if further action is taken.

 

Remember, there are relevant regulatory bodies you can have a good old whinge at. No matter what we think of the PDL's, they are still corporations and as such need to be dealt with professionally and by the book, no matter what they have done to a debtor.

 

Oh, and could we make this a sticky if possible? Give it some more exposure on here?

Edited May 22, 2012 by renegadeimp

[sequenci]

Totally agree with you. Said comments could also be considered libelous.

 

The payday loan market is very much in its infancy still, and there is a lot to learn about the industry - specifically the most effective way of getting arrangements in place. One thing we don't see enough of in these forums is the use of time orders - perhaps it's a cost issue, they are quite expensive - especially when considering the amounts that payday loans often are.

 

We'll get there, though.

[renegadeimp]

Totally agree with you. Said comments could also be considered libelous.

 

The payday loan market is very much in its infancy still, and there is a lot to learn about the industry - specifically the most effective way of getting arrangements in place. One thing we don't see enough of in these forums is the use of time orders - perhaps it's a cost issue, they are quite expensive - especially when considering the amounts that payday loans often are.

 

We'll get there, though.

 

Agreed. And from the way the OFT seem to be eyeing the industry at the moment, we're on the right track. Lets just hope that a certain Mr Beecroft doesnt persuade Mr Cameron otherwise.

Edited May 22, 2012 by renegadeimp

[42man]

I can think of at least another 10 companies who are worse !!!

[renegadeimp]

Yep. However, at least its a start and theyre focusing their actions on the "major" and more "popular" PDL's.

[sequenci]

I can think of at least another 10 companies who are worse !!!

 

I think the choice of Wonga was for good reason e.g. they're one of the biggest players - it not *the* biggest.

[Michael Browne]

The OFT censures Wonga.

 

Citizens Advice are due to take over from the OFT and Consumer Focus.

 

Meanwhile Citizen Advice are accepting funding from Wonga.

 

http://www.bbc.co.uk/news/business-18147255

[citizenB]

http://www.guardian.co.uk/money/2012/may/22/oft-criticises-wonga-debt-collection?CMP=twt_gu

[citizenB]

The OFT censures Wonga.

 

Citizens Advice are due to take over from the OFT and Consumer Focus.

 

Meanwhile Citizen Advice are accepting funding from Wonga.

 

http://www.bbc.co.uk/news/business-18147255

 

Who was being interviewed.. someone from CAB or Wonga ?