HARTLEPOOL MP Iain Wright has welcomed news payday lender Wonga must pay compensation after chasing struggling customers with fake legal letters to get them to stunt up cash.
Wonga must pay £2.6m in compensation after sending letters from non-existant law firms to customers who have fallen into arrears with their repayments.
The letters threatened legal action – but the law firms were false.
In some cases Wonga added fees for these letters to customers’ accounts.
The Financial Conduct Authority (FCA), said 45,000 customers would be compensated.
Wonga has apologised, and said the tactic ended nearly four years ago.
But Mr Wright has hit out at the firm for bullying its customers into making payments, and hopes its compensation payouts includes interest “at Wonga interest levels”.
He said: “I think Wonga is a particularly nasty firm, and this reveals the grubby and shoddy business practices that they’ve resorted to, targeting vulnerable people in society.
“This constitutes fraud, and I think the police should be pursuing it to see if that is the case.
“They’ve made up the law firms in order to pursue debt and add fees.
“I genuinely hope there is going to be interest added – and at Wonga levels of interest.”
The company is the UK’s largest payday lender, making nearly four million loans to one million customers in 2012, latest figures show.
An investigation found that Wonga sent letters to customers from fake law firms called Chainey, D’Amato & Shannon and Barker and Lowe Legal Recoveries.
Tim Weller, the firm’s interim chief executive, said: “We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result.”
“The practice was unacceptable and we voluntarily ceased it nearly four years ago.”
Wonga offers short-term loans ranging between £50-£1,500, charging customers up to 5853 per cent on repayments.