The Law Society has contacted the police and Solicitors Regulation Authority asking for further investigations after payday lender Wonga was found to have sent letters appearing to come from law firms.

In a statement released today, the Society said it was ‘alarming’ that Wonga had sent letters to in-debt customers threatening legal action.

The case has highlighted a loophole where organisations and individuals can pass themselves off as legal professionals by calling themselves law firms. On Wednesday the SRA said it would not take action of its own as Wonga had not used the protected word ‘solicitor’.

Shadow minister for competition and consumer affairs Stella Creasy said Wonga’s apology was ‘not good enough’ and suggested it could be a criminal matter under the Administration of Justice Act.

The Law Society has asked the Metropolitan Police to investigate Wonga. The Society has also called on the Financial Conduct Authority to hand over copies of its investigation and the Solicitors Regulation Authority to examine whether an offence has been committed under the Legal Services Act 2007.

Law Society chief executive Desmond Hudson said: 'It seems that the intention behind Wonga's dishonest activity was to make customers believe that their outstanding debt had been passed to a genuine law firm.

'It looks like they also wanted customers to believe that court action undertaken by a genuine law firm would follow if the debt was not repaid. Depending on the precise circumstances of what has happened, that could amount to blackmail and deception, as well as offences under the Solicitors Act 1974 and Legal Services Act 2007.'

The Law Society has asked the Metropolitan Police to investigate whether the following offences have been committed:

  • Obtaining pecuniary advantage by deception and blackmail.
  • Offences under section 21 of the Solicitors Act 1974.
  • Offences under section 17(1)(a) of the Legal Services Act 2007.

Investigators found that Wonga had sent communications to customers under the names ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’, leading customers to believe that their outstanding debt had been passed to a law firm, or other third party. Further legal action was threatened if the debt was not repaid.

Neither Chainey D’Amato & Shannon nor Barker & Lowe existed. Wonga was using this tactic to maximise collections by piling pressure on customers.

Compensating around 45,000 affected customers is likely to cost £2.6m.