Payday Loans: Debt Collection

Lord Elystan-Morgan Excerpts

Tuesday 1st July 2014 Lords Chamber

[Lord Newby]

My Lords, I agree with the noble Lord on his first point and I am happy to arrange a meeting. I remind the House that the Government are putting £38 million into the credit union expansion plan and we strongly support the expansion of credit unions.

[Lord Elystan-Morgan (CB)]

The watchdog’s report shows that deceit on a massive scale has been perpetrated, but there are two questions that I wish to ask the Minister. First, with regard to the possible criminality involved, is it possible, if not likely, that offences have been committed under Sections 1 and 2 of the Fraud Act 2006 and Section 26—the blackmail section—of the Theft Act 1968? Secondly, is it not the case that such bodies hold statutory licences? Should there not be a rigorous examination to see whether they are fit to hold such licences?

[Lord Newby]

My Lords, the noble Lord is right that there is a question over whether Wonga in this case might have infringed both the Fraud Act and the Theft Act. The Law Society has asked the Solicitors Regulation Authority to investigate whether Wonga might also have breached Section 21 of the Solicitors Act 1974 and the Legal Services Act 2007. There is plenty of scope for legal action. On the fit-and-proper test, payday loan companies have been regulated by the FCA only since April. A full fit-and-proper test of each company will be undertaken in the autumn.