Payday lender Wonga has collapsed into administration, bringing down the curtain on one of Britain’s most controversial loan companies.
The company’s collapse put 500 jobs at risk and comes hours after it stopped receiving new loan applications.
Grant Thornton’s funeral directors have been appointed to handle the administration.
In a statement, Wonga said that after evaluating all options, the board “concluded that it was appropriate to put the companies under administration.”
He added: “Wonga clients can continue to use Wonga’s services to manage their existing loans, but the UK company will not accept any new loan applications. Customers can find further information on the website.
On Wednesday, Wonga held emergency talks with the Financial Conduct Authority on the impact of the collapse on its existing borrowers, estimated at around 220,000.
Grant Thornton is now expected to manage Wonga’s loan portfolio.
The company told customers that despite the collapse, they are still required to repay any outstanding amounts.
Wonga investors include Balderton Capital, Accel Partners, Greylock Partners and 83North.
Earlier this month, Wonga said his struggles were due to a “significant” industry-wide increase in the number of people making claims over historic loans.
The lender blamed claims handling companies for the rise, but said it was making progress on a defined transformation plan for the company.
On Sunday, Wonga said the number of complaints about UK loans taken before 2014 had “accelerated further”.
“Against this backdrop of demands, Wonga’s board continues to assess all options regarding the future of the group and all of its entities,” the company said at the time.
Wonga has faced a barrage of criticism over the high interest she charges on her loans and has been accused of targeting vulnerable people.
In 2014, the company put together a new management team and wrote off £ 220million debt belonging to 330,000 customers after admitting to making loans to people who could not afford to repay them. .
That same year, the FCA said it would introduce stricter affordability controls for the industry and introduce a cap on the cost of payday loans on the amount borrowed per day.
Neil Jameson, executive director of the Citizens UK charity, which called for a cap on the cost of credit, said: “Very few people will shed a tear for Wonga.
“People need access to short-term loans, but they deserve ethical lenders like credit unions who are rooted in the community, not sharks of payday lenders looking to make money. quickly on the back of the misery of the people. “
Unite Deputy General Secretary Steve Turner said: “There will be few tears shed over the woes of Wonga who saw her chickens come home to perch on business practices amounting to legal loan sharks.
“But as the company moves into administration, it will be the workers and customers that the company has taken to the cleaners who will lose out.
“As senior executives leave after pocketing big paychecks to make up for the misery of others, clients will have to be compensated at the back of the queue.
“Wonga and the emergence of similar payday loan vultures are a symbol of all that is wrong with our economy which sees too many people trapped in precarious work and spiraling into debt due to declining incomes. “