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Business Comment

Wonga 'letters' can’t be left to slip quietly off MPs’ agenda


Unfortunate news comes in from Westminster Wonga watchers.

I hear that attempts by MPs to demand parliamentary scrutiny of the Wonga fake legal letter scam have been kiboshed by the parliamentary clerks because of the City of London Police’s decision to U-turn on its earlier decision not to consider a criminal investigation.

Certain MPs have been told specific questions about the scandal – particularly about potential illegality – are inadmissible due to the potential police interest.

As a result, the more angry, or maybe just plain curious, MPs taking an interest have had to table peculiarly torturously phrased questions not mentioning the Wonga scandal by name but clearly referring to it.

So we get Paul Flynn, MP, asking if the Chancellor will bring forward legislation allowing the Financial Conduct Authority to stage its own investigations into “alleged illegal actions undertaken before its creation”. This is clearly an oblique reference to the fact that Wonga got off lightly because the FCA was only allowed to deploy the limited punishments available to the loan company’s deceased regulator the Office of Fair Trading.

Such questions may produce some useful answers: they may not.

But the particular events at Wonga need more forensic, and public, challenging. Were directors aware of the scam? Which members of staff were? Are steps being taken to prevent those involved working in consumer lending again? How much effort has been made to find an alternative way of levying a proper fine on the company? Ditto to finding a legal means of forcing the publication of a full report on the investigation.

Meanwhile, it appears the Wonga practice of inventing debt recovery companies is not unique.  The Government’s own Student Loans Company (SLC) was sending out letters to cash-strapped customers under the inventively named Smith Lawson & Company Recovery Services (“SLC”, geddit?) and has been doing so for years.

All the more reason for detailed questioning either in court or in Parliament.

But I’m not convinced this will ever happen. It’s not unlikely that, in a few months, the plods will quietly decide they’re not going to take the matter any further (they’ve already done this twice so far), politicians will have moved on to the pre-election razzmatazz, and the whole affair will quietly disappear. No awkward questions for ministers, no trials of the wrongdoers and no details of the scandal to be published by the regulator.

Consumer credit is certainly not disappearing any time soon. Surely that makes it more vital than ever that senior people involved are questioned rigorously in public.