Wonga specializes in short-term loans of up to £1,000, sometimes to people who have been refused credit elsewhere. The average length of a Wonga loan is about 17 days, according to the company's website which also shows its representative annual rate at 5,853 percent.
Sending out letters from fictitious outfits "Chainey, D'Amato & Shannon" and "Barker and Lowe Legal Recoveries", Wonga told customers that their debts had been passed onto law firms or another third party.
The fake legal letters threatened further action if the debt was not repaid.
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"Wonga's misconduct was very serious because it had the effect of exacerbating an already difficult situation for customers in arrears", Clive Adamson, direction of supervision at the FCA, said in a statement.
Some customer accounts were charged administration fees associated for the letter sending. This pressured individuals into making loan repayments that they could not afford, the FCA said.