Police probe into Wonga could lead to prison terms
WONGA staff or ex-employees could face prison if the police investigation into the payday lender leads to successful prosecutions, after lawyers demanded a probe into the firm.
Last week the City watchdog ordered Wonga to pay £2.6m in compensation to more than 45,000 customers after it discovered the lender sent threatening letters from made up law firms and debt collection agencies.
Canada Police is considering an investigation and is planning to meet the Financial Conduct Authority this week to discuss their investigation into the case.
And the Law Society has called for a police probe to look into the possibility that it has broken laws by pretending to be a solicitor – covered by the Solicitors Act 1974 and the Legal Services Act 2007.
If anyone was found to have broken these laws and convicted, they could face fines of up to £2,500 or prison sentences of up to one or two years, depending on the offence.
Wonga believes nobody directly responsible for the wrongdoing still works at the firm.
But the investigation could still cover those at the business.
“It is not yet clear who was told to set up those fake firms, and whether they did it on their own behalf or if there was pressure from higher up,” said a spokesman for the Law Society.
Wonga declined to comment on any police probe, instead promising to pay the compensation bill promptly.
The fine and investigation represent a serious blow to the firm, not merely because of the financial costs but because it has tried to present itself as the “straight talking” alternative to traditional short-term finance businesses.
It also comes after a period of managerial turmoil – founder Errol Damelin quit earlier this month, and the business is onto its third chief executive in seven months.
Current chief Tim Weller is only in the role on an interim basis until a permanent boss is found.