Payday lender Wonga.com has been criticised by the trading watchdog for using aggressive and misleading debt collection methods.
Wonga suggested in letters and emails without appropriate justification that some customers may have committed fraud, the Office of Fair Trading (OFT) said.
Several hundred letters went out to customers who had asked their card providers to reverse a payment made to Wonga and to those who had entered into debt management plans, the OFT said.
The watchdog said the high-profile lender told customers it would consider contacting police if they did not do as Wonga asked in the letters, which were sent out more than 18 months ago.
The OFT has imposed a requirement on Wonga under the Consumer Credit Act, saying that it must not allege that customers have or may have engaged in criminal conduct, without the necessary justification.
The watchdog also said Wonga must not tell customers they should not be in debt because of the job they hold or for any other reason, after finding a Wonga call script stating that customers who work in the public or financial sectors should not go into debt.
The measures mean that if it behaves in this way again, Wonga would face fines of up to £50,000 and its consumer credit licence could be affected.
Wonga said it plans to appeal against the OFT's decision. It said the letters were sent on "isolated" occasions and it has already put a stop to such activities.
It admitted the tone of the letters "fell below our usual high standards" but said in a statement: "Wonga has put in place procedures to ensure these communications cannot be repeated and it has provided assurances to the OFT to that effect.
"In particular, current fraud processes ensure cases of suspected fraud are always referred to an in-house team of experienced professionals and suspicions that a customer may have acted fraudulently are not communicated to the customer."
It said the call script highlighted by the OFT had not been used since January 2010.
The statement continued: "In these circumstances, it is unnecessary to impose a requirement on Wonga to no longer use the communications or the script. Wonga has already demonstrated these were isolated incidents."
David Fisher, OFT director of consumer credit, said: "We have acted to ensure that Wonga does not behave this way again. I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers."
Wonga.com recently sparked controversy by launching a service offering loans to small businesses, saying it could help those companies waiting for longer-term funding or if big invoices have been paid late.
Shadow business secretary Chuka Umunna told the Daily Mail it was "deeply worrying" that firms would need to turn to Wonga for help.
The OFT launched an extensive review of the payday lending sector generally in February, amid concerns that vulnerable customers are being given loans without the proper checks being carried out and that too many loans are being rolled over. It is due to give its findings and strategy to raise standards later this year.
The sector has exploded in size in recent years, with new players arriving from the United States. Consumer Focus figures indicate that the payday loans market increased from 300,000 borrowers in 2006 to 1.9 million in 2010.
Payday lenders have argued that they offer a much-needed service to customers and their high interest charges are often more transparent than those of mainstream banks.
Sarah Brooks, Director of Financial Services at consumer group Consumer Focus, said: "A record increase in complaints to the Ombudsman and the high number of upholds show consumers clearly need improvements in how they are being treated by banks and insurers. Outside of PPI it is disappointing that the number of banking complaints only fell by one per cent but the numbers of upheld complaints in key areas such as current accounts increased 31 per cent.
"Customer service and complaints handling must be improved so that banks deal fairly with complaints rather than obliging their customers to go to the Ombudsman."
Suggested For You
Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements. Learn more