Clegg: Wonga bosses must look at their consciences over fake law firm letters

Wonga executives need to look at their consciences and ask if they have done enough to compensate customers threatened with debt collection by fake law firms, Nick Clegg, the deputy prime minister, has said.

The Liberal Democrat leader said the payday loan company had "more or less destroyed their reputation for good governance and being a reputable company overnight for basically lying to people to get money".

He turned up political pressure on Wonga after the firm was ordered to pay more than £2.6m compensation for sending letters to customers from non-existent law firms threatening legal action over outstanding debts.

The Financial Conduct Authority (FCA) said Wonga had been guilty of "unfair and misleading debt collection practices" after it emerged that the lender had created fake law firms using the names of employees who in some cases still work for the company. The regulator said the firm would be compensating around 45,000 customers who had received the letters.

Speaking on his LBC 97.3 radio show, Clegg said the government was capping "sky-high interest rates" charged by payday lenders, but Wonga should think about whether it could do more to make amends. "I think Wonga need to look into consciences and ask whether they have done enough to address the harm they have done," he said.

Tim Weller, Wonga's interim chief executive, has apologised and said the staff responsible have left the company. He said on Wednesday: "This is not the proudest day in Wonga's history … We would like to apologise unreservedly to anyone affected by the historical debt collection activity and for any distress caused as a result. The practice was unacceptable and we voluntarily ceased it nearly four years ago."