The City of London Police was aware of the practice in 2012, when the Office of Fair Trading was investigating the company. However, it did not consider opening a full criminal investigation until the compensation was agreed in June.
However, on Thursday, it said it would not proceed any further with the case, saying that most of the letters did in fact say somewhere that they are from Wonga.
“The main allegations were that Wonga had deceived its customers by sending letters falsely purporting to be debt recovery agencies,” a spokesman said.
“After a thorough review of all the material gathered the City of London Police has concluded this was not the case and that, overall, there were no grounds to progress a criminal investigation.”