Payday Loan King Wonga Taking Fraudulent Funds from Random Victims
It’s bad enough that if you take a payday loan from Wonga you’re hit with exorbitant interest of over 4000%, but what if you’re hit with payments for a payday loan you never took? Once again Wonga is taking from people who don’t owe them – allowing fraud to blossom – and then refusing to sort out the victims they’ve taken from! A This Is Money investigation has been launched after repeated complaints have reached the Daily Mail about Wonga’s antics.
I wrote last month about Wonga taking from consumers fraudulently – taking from people who had never had a payday loan and from people who had long since paid off their payday loan. Despite the outcry, the theft of funds continued – and that is what it is full stop – if someone takes money from you they’re not entitled to, it’s theft. If Wonga continues like this, I believe their executives should face criminal charges.
And the banks are not behaving any better. Rather than refunding money from the fraud – as they would do in any other similar circumstance – the banks refer them to the payday lender. When victims contact Wonga, they refer them to the police rather than putting a stop to the theft. This circle of incompetence leaves payday loan fraud victims without the money that was stolen and vulnerable to further improper takings from Wonga.
Fraud protocol for banks is to refund the money to the victimised customer and then launch an investigation into how the money was stolen. But perhaps banks don’t want to sully themselves by dealing with Wonga and the dirty business of a payday loan, but fraud is fraud and treating their customers differently because it was Wonga that stole from them is wrong full stop.
What’s particularly troubling about Wonga and other payday loan providers is that they are not regulated – not at all – not by any agency! They must have a Consumer Credit Licence (CCL) issued by the Office of Fair Trading (OFT), but after that, they’re free to misbehave with no regulator looking over their shoulders. And that seems to be exactly what Wonga is doing again and again with no reprisals to date…
Wonga says the fraud has been occurring via identity theft – when people get a loan using someone else’s credentials – or by entering someones else’s credit card or bank information on a loan they’ve taken out. But that’s not the extent of how the payday loan provider is taking advantage.
Here are some recent abuses by Wonga where they stole payday loan payments from innocent consumers:
#1 Katie, who had had a payday loan from Wonga years before that had been paid off, was shocked to see deductions from her Barclays account by Wonga. She called them and they agreed that they were in the wrong and promised to return the stolen funds. When she went to close her account to prevent further theft by Wonga, she found they’d taken a further £370 after she notified them of the fraud!
#2 Jonathon saw an £1,800 pending deduction from his Barclays account – he called the bank as he had never taken a payday loan and they were able to block the theft. He reported the attempted fraud and cancelled the card that had been used. Then three weeks later Wonga succeeded in stealing the £1,800 which they took nearly 10 days to return.
#3 Piper had £521 stolen from the payday loan firm yet she’d never had a loan so there was no reason for her account or card information to be in their system. Wonga promised to return her calls but never did. Piper found that you cannot contact Wonga fraud directly – but when she finally got in touch with them, they told her they are “experiencing a huge amount of fraud at the moment.”
#4 Collette had £715 stolen from Wonga – she had no previous loans with them, so they should never have had any of her account information. Wonga emptied her account and exceeded her overdraft as well. Her bank referred her to Wonga (improperly) to get it sorted. Wonga referred her to the police who referred her back to her unhelpful bank. It took her involving This is Money investigators to get it righted.
#5 Paul had £750 stolen by Wonga – again this was someone who’d never transacted with the payday loan vendor – and his bank referred him to Wonga to try to get his cash back. He also had to get This is Money involved to get back what was stolen.
Walthamstow MP Stella Creasy says she’s gotten 20 similar complaints against Wonga recently and is pushing for official action against the payday loan provider, but so far help is not forthcoming. A rep from the UK Payments Association said, “Those affected by fraud should contact their bank to report the fraud, who then should deal with the issue. Victims should not have to approach the business concerned to recover the money.”
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