Payday lender Wonga has yet to contact more than a third of customers identified as recipients of letters purporting to be from independent law firms, MPs heard today. 

Nick Brookes, chief credit officer for Wonga, told the Treasury Select Committee of the House of Commons that 18,000 of the 43,000 customers affected have yet to be contacted.

Around 5,000 of those who have been contacted have replied so far, with 99% of them accepting Wonga’s offer of compensation.

In June Wonga agreed with the Financial Conduct Authority to compensate customers who received letters from non-existent law firms warning of action to recover arrears. 

Wonga admitted creating the names Chainey, D’Amato & Shannon and Barker and Lowe Legal Recoveries to threaten legal action – and charged extra for administration fees to cover the cost of sending letters from them.

The issue is subject to an ongoing police investigation. Brookes that confirmed no one involved with the letters still works for the company. 

‘This is something that happened many years ago, from 2008 to 2010,’ he said. ‘We have had to go back a substantial way to identify customers and then contact customers. Quite often details have changed and it has been challenging to reach those customers to make an offer to them.’

Committee chair Andrew Tyrie said he had been advised by the police to limit the questions he could ask of Brookes about the issue of fake law firms.

But the Wonga witness, who joined the business two months ago, admitted that letters purporting to be from solicitors ‘should not have happened’. He added: ‘The decision had impacts on real customers and we deeply regret that.’

Following the evidence session, Tyrie said: ‘The 18,000 customers who received misleading letters from "fake" law firms but, who have yet to be contacted by Wonga, are evidence that a lot more work is needed to change the industry’s culture.’