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Wonga-style ‘Solicitors’ Letters’ Attract Potential Criminal Liability

Monday, 11 August 2014

Recent debt recovery practices of sending communications under non-existent solicitors firms’ names could attract criminal liability.

Payday loan company Wonga has agreed to pay over £2.6m in compensation in response to the Office of Fair Trading’s finding that the company had created fictional law firms in order to threaten legal action against its customers in arrears. In addition, the Law Society had asked the Metropolitan Police to investigate whether Wonga has also committed a variety of criminal offences.

Companies thinking of using ‘innovative’ techniques to chase outstanding debts should take note.

What Did Wonga Do Wrong?

Investigators found that Wonga had sent communications to approximately 45,000 customers under the names ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’, fabricated names taken from Wonga’s employees and not real law firms.

The communications typically went on to say, “We have been instructed by Wonga to recover from you a debt of £X”.

The Law Society claims that the aim was to make customers “believe that court action undertaken by a genuine law firm would follow if the debt was not repaid”. If this is the case then Wonga’s behaviour possibly attracts criminal liability.

What are the Potential Offences Being Committed?

The Law Society has claimed that the company’s behaviour potentially implies the commission of a number of serious offences, such as obtaining pecuniary advantage by deception and possibly even blackmail.

Furthermore, and in any case, section 21 of the Solicitors Act 1974 includes the offence of any unqualified individual wilfully pretending to be a solicitor, including using "any description implying that [s/he] is qualified or recognised by law as qualified to act as a solicitor".

Similar offences are found in section 17(1)(a) of the Legal Services Act 2007.

Criminal Liability Risks

That such behaviour potentially attracts criminal liability should act as a sufficient deterrent against utilising Wonga-style communications as part of a credit control process.

This liability is on top of the £2.6m compensation precedent the Financial Conduct Authority set in relation to Wonga’s practices. 


Whilst regulators are currently dealing with these practices outside of a criminal framework, the City of London Police have stated that, following the establishment of a compensation agreement, Wonga’s practices are currently being reassessed as to whether a criminal investigation is now appropriate.

Any future criminal investigation would negatively affect the public image of the company, and, regardless of whether any successful prosecution results, this prospective corporate stain would inevitably extend to its profit/loss account.

For specialist advice regarding the implementation of appropriate credit control processes contact Peter Gourri today by email or telephone 0207 611 4848.

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