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Newcastle United sponsors Wonga may face criminal investigation

Controversial payday lender Wonga, shirt sponsors of Newcastle United, may face a criminal investigation after police asked to meet with the Financial Conduct Authority (FCA).

City of London police said it would look into whether there was enough evidence to start a criminal investigation into fake legal letters sent out by the company over the course of two years from 2008 to 2010.

And the force has reportedly asked to meet with the FCA to discuss Wonga after the fake letter furore blew up last week.

Last Wednesday the FCA said the payday lender was to pay £2.6m in compensation, after it sent letters from made-up law firms to tens of thousands of customers.

The company, which lends consumers up to £1,000 at an annual percentage interest rate of 5,853pc, wrote to 45,000 customers who had fallen into arrears, posing as “Chainey, D’Amato & Shannon” and “Barker and Lowe Legal Recoveries”.

The letters — sent between October 2008 and November 2010 — appeared to give customers the impression that their debts had been passed on to a collection agency, and threatened them with legal action if they did not repay.

The Law Society has said it had asked the Metropolitan Police to investigate whether any offences, such as blackmail or those under the Solicitors Act, had been committed.

But any investigation would be run by the City of London force as it specialises in financial crime.

North East Premier League football club Newcastle United, meanwhile, are facing mounting pressure to dump Wonga, who’ve been the club’s shirt sponsors for one season.

It comes after the club’s star striker, Papiss Cisse, at first refused to wear the shirt for religious reasons last season, but later changed his mind.

Wonga has introduced a series of changes designed to appease customers since last week’s news.

Tessa Cook, head of Wonga’s UK consumer lending arm, has introduced a three-day grace period for customers who don’t meet their payment date before a default fee is charged.

In addition, default fees have been reduced from £30 to £20. The two changes are understood to be part of a series of broader changes to the way Wonga interacts with its customers, particularly those in arrears.

The changes are part of a wider reset of the way Wonga operates in the UK, which are likely to include changes in marketing and pricing.

Ms Cook also admitted to a national newspaper at the weekend that the public revelations of the past week had been “difficult” for Wonga’s 1,000 employees.

This was posted in Bdaily's Members' News section by Martin Walker .