Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k custs

[Amethyst]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Lol no, its a firm that don't feature on these boards much they are more business debt than consumer. still it works as a get your attention marketing strategy as it caught my eye and I get stacks of emails trying to sell me some completely inappropriate service for a self help website

[PAWS]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

I think this is Commercial Domestic Investigations. The wording is exactly like their sanctimonious add in CCR magazine. Never heard of them chasing anyone!

[Nibbler]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

http://www.moneysavingexpert.com/new...-bad-as-wongas

[dogtired]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

I sent the ones I had from HBOS to the regulators, just thanked me and that they were contacting the bank but that I may not be made aware of any outcome.

[leclerc]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

"We looked at the case 15 months ago and decided most appropriate course was for the regulator (OFT) to continue investigating" -

That was the response from City of London Police re my tweet about investigating Wonga!! I tried to explain to them that Wonga were committing an offence by impersonating solicitors and response came there none!

Funny, that

Apologies but was late on the thread on this so am going through the thread. Here is an article from the lawgazette as to why it was not a criminal offence of impersonating a solicitor: http://www.lawgazette.co.uk/practice...ed&PageSize=50

[leclerc]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

First thing that jumps out is that £50 should be a REFUND not compensation !

Compensation should be for the additional stress caused and would be a flat rate compensation paid now, on which basis I was okay with the £50.

However this is a fee added to the account of £50 in 2010 - so should be refunded, plus all interest that fee attracted (contractual interest!), plus 8% simple stat interest per annum.

and that refund should be as well as compensation.


They don't say solicitors, but they use words like instructed and our client etc which is a clear effort to intimate they are solicitors.

(I missed BBC breakfast so sorryif I'm just repeating what was said on there)

My understanding might be different to you as I had a research on this one a couple of days ago....the £50.00 is an offer of compensation which of course you could reject and argue that they owe more and put your point of view across on that basis.

[EXC]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

To FCA:

I wish to make a request for information under the Freedom of Information Act 2000.

On 25 June 2014 Tracy McDermott stated on BBC Radio 5 Live that FCA did ''not have the power to impose a penalty as a punishment'' on Wonga because ''the misconduct took place before we took over regulation of this sector in April 2014'' which was previously regulated by OFT.

Clearly this raises serious questions as to whether a regulatory black hole exists whereby the Payday Loan sector or indeed any consumer credit sector taken over by FCA can rest assured that it will go unpunished for any misconduct it undertook more than two months ago.

1) Please provide me with the internal advice and briefing notes Tracy McDermott relied upon to make the above statements.

2) Please provide me with the relevant legislation underpinning that advice.

Yours
EXC

Dear Mr EXC,

Freedom of Information: Right to know request

Thank you for your request under the Freedom of Information Act 2000 (the Act), for information relating to Tracey McDermott’s appearance on BBC Radio 5 Live. The full text of your request is in Annex A.

Your request has now been considered. Please accept my apologies for the length of time taken to respond to your request.In relation to point (1) of your request, Tracey McDermott would have received a number of briefings, in the two year period leading up to the transfer of consumer credit regulation to the FCA on the general subjects of payday lenders and the FCA’s and OFT’s powers. In addition, Tracey would have referred to the FCA’s public lines used for engaging with the press and public on the action we took, and why we could not fine Wonga.

An extract from those public lines relevant to your request is at Annex B. The FCA may only take action according to the legislation in force at the time of any misconduct. In the case of Wonga’s misconduct, which took place between October 2008 and November 2010, that would have been subject to the powers granted to the OFT. At that time, the only circumstances in which the OFT could impose a fine were where a consumer credit firm breached a requirement imposed by the OFT.

The OFT had not imposed any such requirement on Wonga. If it had imposed such a requirement, and Wonga had subsequently breached that requirement, then the FCA could have considered imposing a financial penalty of up to £50,000.With effect from 1 April 2014, consumer credit firms are subject to FCA regulation.

The FCA has a variety of powers available to us in respect of misconduct taking place after that date.In the particular case of Wonga, we reached an agreement with Wonga that it would voluntarily apply for a requirement on its permission to conduct a consumer redress exercise. If Wonga had not agreed, we could have used our powers to impose the requirement.

The OFT did not have the power to require consumer credit firms to conduct customer redress exercises.In relation to point 2 of your request, the relevant transitional provision supporting the statement made by Tracey is Art 47 of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 No 1881 which can be found at: http://www.legislation.gov.uk/uksi/2013/1881/article/47/made

Yours sincerely,
Mandy Holmes
Associate / Information Access Team / Finance and Operations

Financial Conduct Authority25 The North Colonnade
Canary Wharf
London
E14 5HS

Tel: +44 (0)20 7066 8080
www.fca.org.uk

Annex A
Request dated 26^th June 2014.

I wish to make a request for information under the Freedom of Information Act 2000.

On 25 June 2014 Tracy McDermott stated on BBC Radio 5 Live that FCA did ''not have the power to impose a penalty as a punishment'' on Wonga because ''the misconduct took place before we took over regulation of this sector in April 2014'' which was previously regulated by OFT.

Clearly this raises serious questions as whether a regulatory black hole exists whereby any sector taken over by FCA can rest assured that it will go unpunished for any misconduct it undertook which occurred more than two months ago.

1) Please provide me with the internal advice and briefing notes Tracy McDermott [sic] relied upon to make the above statements.

2) Please provide me with the relevant legislation underpinning that advice.


Annex B
Extract from the FCA’s Press Office Briefing Q&A

“Why no fine/ ban? These failings all occurred before the FCA regulation of credit, so the FCA rules did not apply and we cannot impose fines.

Q Why haven’t you fined Wonga?A All of the failings that are set out in our press release took place under the previous regulatory regime (the OFT). Therefore our rules did not apply, and we are unable to now use them to enforce a fine or impose a sanction for these historical failings.”

[Fred]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

EXC................interesting they are so limited, my current outstanding argument with the defunct OFT is now with the CMA as are most of the employees, it begs the question "will the CMA look into previous OFT decisions that were not in the public interest & provide some answers"

There was an interesting comment at the tribunal over my use of "defunct OFT" in as much as their work continues under a different guise.

[andrew1]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

The OFT did not have the power to require consumer credit firms to conduct customer redress exercises.

...which seems incredible given the breaches of the CCA which it regulated, were committed by so many firms such as Swift who used unlicenced trading names which is a criminal offence under the Act and despite ferocious complaining by many it remained unpunished.

Did they feel that consumers would be fully aware of the law when under repossession threat and have the whole of the Judiciary to fight their corner for them instead? - Yeah right!

OFT was not fit for purpose and heads should roll. I think you were right EXC, historic failings are a 'get out of jail free card' for these lenders.

A1

[Fred]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

The OFT had the power to impose requirements on license holders & enforce if necessary with the right to appeal.....................the whole process a dinosaur, business could run rings round them. :lalala:

[EXC]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

...which seems incredible given the breaches of the CCA which it regulated, were committed by so many firms such as Swift who used unlicenced trading names which is a criminal offence under the Act and despite ferocious complaining by many it remained unpunished.

Did they feel that consumers would be fully aware of the law when under repossession threat and have the whole of the Judiciary to fight their corner for them instead? - Yeah right!

OFT was not fit for purpose and heads should roll. I think you were right EXC, historic failings are a 'get out of jail free card' for these lenders.

A1

The problem all along with the OFT is that they weren't really a regulator, they were a competition authority and as such never had the power to require customer redress schemes. Thankfully the FSA did and that power has been transferred to FCA.

[andrew1]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

The problem all along with the OFT is that they weren't really a regulator, they were a competition authority and as such never had the power to require customer redress schemes. Thankfully the FSA did and that power has been transferred to FCA.

Is that right - Not a regulator?, Are you sure about that EXC? Who regulated the CCA then if you don't mind me asking?

A1

[EXC]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Is that right - Not a regulator?, Are you sure about that EXC? Who regulated the CCA then if you don't mind me asking?

A1

I can't find it now but I remember watching John Fingleton giving evidence before the Treasury Select Committee in which he explained that OFT is (was) principally a competition authority and 'not really a regulator' (it always described itself as the UK's consumer and competition authority'') because Parliament never gave it the powers of a true regulator and that's essentially what the FCA are saying in their response to the FoI request.

In its defence although it was tasked with 'regulating' consumer credit it only had the powers of a competition authority with which to do it. So the criticism it got for not regulating consumer credit effectively (I always used to say it couldn't regulate the water temperature from a mixer tap) should really have been directed at Parliament.

[enaid]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

So correct me if I am wrong, as I see it all the firms that have been ripping us off to some tune have been overseen ,( for lack of a better word) by cocked up authorities who had no more authority than the man in the moon?
That only now after all the pain and suffering many have gone through financially, the Government have understood we are being unfairly and in some cases unlawfully treated, (or maybe because we the consumers are on to 'em). So have cocked up another 'Regulator' who may or may not (we will have to wait and see) be able to make things fairer and better understood all round.
So if I have this right, none of the firms who have wronged us in the past can be punished in any way or made to put right what they did?

[andrew1]

Re: Wonga to pay redress for unfair debt collection practices – FCA - £2.6m to 45k cu

Maybe then, if what you say is correct EXC, and it certainly would explain a lot as you suggest, a letter needs to go to someone in the Government asking who exactly was the proper regulator of the Consumer Credit Act entrusted with the task of enforcing the CCA pre- FCA?

Someone needs to be held account for this and although I understand the County Courts are the place for CCA we all know the amount of knowledge or substance of the Judges knowledge or interest there is in those courts to find remedies.

I wouldn't know who to write to, but this may flush out a thing or two.

I do take issue with this because as I mentioned with Swift Advances plc, they traded without their trading names on their licence and got away with it. No matter who we spoke to, Trading Standards or the OFT or the Police, nobody did a thing to remedy this and people with Regulated loans were being taken into court and being repossessed whilst they (Swift) were committing a criminal offence. That, wasn't right. Perhaps now we know why!

A1