Breaking News: Payday Loan Company Turn Out to Be Dicks

The puppet stars of Wonga's adverts.

Wonga employed many distinguished firms of non-existent solicitors between 2008 and 2010. These firms – with their imaginary leather-studded, wood-panelled offices, furnished inside the minds of Wonga's employees – did an excellent job of making up letters to clients who, sadly, did exist.

“Dear Highly Indebted Sucker,” they’d start. “On behalf of Messrs. Invisible, Non-Existent and Phantom, I hereby instruct you to turn over whatever’s left in your mangy, flea-bitten accounts to Wonga CEO Errol Damelin right now. If not, you’ll be dragged through court until you have terminal migraines from the endless banging of gavels.

"You'll then be forced by bailiffs to run on a treadmill for eight hours a day, generating electricity to charge Mr Damelin's Kindle, until such a time he is satisfied you have paid off whatever you owe to him and his family. Money. Now. Money. Now. Give it. Give it. Give it. Yours sincerely, Invisible, Non-Existent and Phantom, Non-Existent Legal Recovery Specialists.”

The recipients of these letters would presumably then consider dropping the few remaining coins they'd been saving in the meter, crawling to the nearest oven and gassing themselves. Of course, what they really should have realised was that, in the grand scheme of things, Wonga were far too tight to pay real solicitors. And why would they even entertain the idea? Wonga surely know full well that lawyers are bloodsuckers who charge inflated sums for practically knack-all – bastards preying on vulnerable payday loan companies, society’s weakest form of banking.

Inkjet printers, on the other hand, come cheap – apart from cartridge refills (the bloodsuckers), but you can get those done on the grey market. And so it was that Chainey, D’Amato & Shannon – Wonga's invisible "legal recovery" firm – came into existence.

It’s one thing to do the deed, but as ever it’s the details that seem the most embarrassing. The fact that someone in Wonga HQ had to sit down and come up with a name for these legal eagles, carefully shaded in the text not to actually call themselves "solicitors", and carefully shaded in the context to give every impression that yes, that’s bloody well exactly what they were, and you shouldn’t mess about, sonny, or you’d be shitting summonses soon enough.

How did they come up with Chainey, D’Amato & Shannon? You’d hope that they just heard a dirty joke about the Englishman, the Irishman and the Italian and cribbed it off of that. But no – the truth is slightly more sad and humiliating: these were the real names of three executives at the company, who evidently lent inspiration to person or persons unknown.

At the time, person or persons unknown probably got a raise. It’s an elegant solution – we’ve all fronted a bit, and if the net effect is faster payment, well why not save everyone some bother? If they didn’t get a raise for that initial idea, then they must surely have been rewarded for the follow-up: charge people £50 for the cost of issuing this legal letter (£0.09 for the Inkjet ink, £0.25 for the paper and envelope, £0.35 for the first class stamp and £49.31 for "administration fees", but that’s lawyers for you, eh?).

Unfortunately, there is – as Paul Mason pointed out – the 1970 Administration of Justice Act. Which means that sending fake letters to hound people is a real crime, meaning person or persons unknown could go to jail – an admission that new CEO Tessa Cook sidestepped with all the grace of a woman caught wearing her shoplifting with the tags still on. Cook arrived just recently to replace Damelin – the South African entrepreneur who started the company – who was pushed out just the other week, his ousting presumably having something to do with all of this.

Wonga founder and former CEO, Errol Damelin (Screen grab via)

The Wongans have since ceased this practice, and this week agreed to pay out £2.6 million in order to compensate 45,000 victims. "Soz," the company now admits, writing under its real name. That’s £57 compensation per person. A lot? Not at a back-dated 4,000 percent APR. But the law specifies that only 8 percent annual interest applies in cases like this; the law’s very even-handed sometimes.

The other curious fact to come out of the repayment headline is that by 2010 – back when no one outside the twin communities of auto-destruct drunks and cash-strapped single mums had heard of Wonga – there were already 45,000 people who'd got so far along the default road that they were being hounded by Chainey, D’Amato & Shannon. It gives you some idea of quite how widespread payday loans must be now.

Wonga certainly have nicer offices than they did four years ago. Last night, the news showed clips of Wonga’s new HQ. It is the beautiful art deco former-Carreras Tobacco building in Mornington Crescent. Everyone likes a fag. Everyone could use a payday loan, providing they don’t actually need one; you can’t help but feel there's a piece of unconscious poetry there.

Implicitly, the Wongans understand only too well that they are the cretins who have to deal with the stuff that society wants, but that society is ashamed of wanting. It’s not a nice job. Like the head of marketing for British American Tobacco (BAT), when you go to parties you usually avoid talking directly about what it is you do. Maybe you tell a few active fibs – has anyone actually met a BAT marketing man lately? Perhaps they coach you on what to say at parties nowadays. God knows, it can’t be easy.

But that’s the tension. Someone’s got to muck out the stalls of modern capitalism – the need is there. But who? Not the people who go off and work for NGOs. Not the primary school teachers. No. The leftovers. The lowly rump of business school types. The no-marks. Not just the sort of people who’d make up a fake law firm, but ones surrounded by the sort of people who’d just go along with that. We are all Wongans; they’re just the dark bits we’d like to push out.

@gavhaynes

Previously: The Witch Doctor of Hampstead's Sad Trail of Destruction