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OFT imposes requirements on Wonga
wonga.com Limited has been sanctioned over its debt collection practices by the Office of Fair Trading (OFT).
The OFT has imposed requirements on the firm in response to two types of written correspondence and the wording of one call script used by the short-term lender to recover debts owed by customers.
In a statement, the OFT said Wonga had sent letters or emails without justification which suggested customers may have committed fraud and that Wonga would consider contacting the police if customers did not act as Wonga requested.
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.”
But Wonga has criticized the requirements as unnecessary on two grounds, and said it would appeal against the requirements.
In a statement the firm said the actions which provoked the regulator were two isolated incidents from 18 months ago where the firm genuinely suspected dishonest conduct from customers.
wonga added that the communications in question have not been sent since the incidents, but admitted that the tone of the letters “fell below our usual high standards”.
“Wonga has put in place procedures to ensure these communications cannot be repeated and it has provided assurances to the OFT to that effect,” the firm’s statement read.
“In particular, current fraud processes ensure cases of suspected fraud are always referred to an in-house team of experienced professionals and suspicions that a customer may have acted fraudulently are not communicated to the customer. Regarding the collections script in question, Wonga has confirmed to the OFT it has not been in use since January 2010 and that Wonga no longer uses scripts for collections activity.”
The OFT requirements mean Wonga’s 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.
wonga must also not state that a customer should not be in debt if the customer has a certain employment status or for any other reason.
The action is the first taken against a short-term lender after the OFT launched an extensive review of the payday loan sector in February.
The OFT has imposed requirements on the firm in response to two types of written correspondence and the wording of one call script used by the short-term lender to recover debts owed by customers.
In a statement, the OFT said Wonga had sent letters or emails without justification which suggested customers may have committed fraud and that Wonga would consider contacting the police if customers did not act as Wonga requested.
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.”
But Wonga has criticized the requirements as unnecessary on two grounds, and said it would appeal against the requirements.
In a statement the firm said the actions which provoked the regulator were two isolated incidents from 18 months ago where the firm genuinely suspected dishonest conduct from customers.
wonga added that the communications in question have not been sent since the incidents, but admitted that the tone of the letters “fell below our usual high standards”.
“Wonga has put in place procedures to ensure these communications cannot be repeated and it has provided assurances to the OFT to that effect,” the firm’s statement read.
“In particular, current fraud processes ensure cases of suspected fraud are always referred to an in-house team of experienced professionals and suspicions that a customer may have acted fraudulently are not communicated to the customer. Regarding the collections script in question, Wonga has confirmed to the OFT it has not been in use since January 2010 and that Wonga no longer uses scripts for collections activity.”
The OFT requirements mean Wonga’s 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.
wonga must also not state that a customer should not be in debt if the customer has a certain employment status or for any other reason.
The action is the first taken against a short-term lender after the OFT launched an extensive review of the payday loan sector in February.
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