Payday lender Wonga collapses into administration

The firm's collapse has put 500 jobs at risk

Payday lender Wonga has collapsed into administration, bringing down the curtain on one of Britain's most controversial loans companies.

The firm's collapse has put 500 jobs at risk and comes hours after it stopped taking new loan applications.

Wonga administration - what happens now?

In a statement, Wonga said that having assessed all options, the board "concluded that it is appropriate to place the businesses into administration."

It added: "Wonga customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications. Customers can find further information on the website."

On Wednesday, Wonga held emergency talks with the Financial Conduct Authority over the impact of collapse on its existing borrowers, thought to total around 220,000.

It is expected that Grant Thornton will now run Wonga's loan book.

Customers were being told by the company that despite the collapse, they are still required to repay any outstanding money.

Over the weekend, Wonga said it was "considering all options", just weeks after shareholders pumped £10 million in a bid to save it from going bust.

Investors in Wonga include Balderton Capital, Accel Partners, Greylock Partners and 83North.

Earlier this month, Wonga said its struggles were due to a "significant" increase industry-wide in people making claims in relation to historic loans.

The lender blamed claims management companies for the rise, but said it was making progress against a transformation plan set out for the business.

On Sunday, Wonga said the number of complaints related to UK loans taken out before 2014 had "accelerated further".

"Against this claims backdrop, the Wonga 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 it charges on its loans and it has been accused of targeting those who are vulnerable.

In 2014, the firm introduced a new management team and wrote off £220 million-worth of debt belonging to 330,000 customers after admitting making loans to people who could not afford to repay them.

In the same year, the FCA said it would bring in stricter affordability checks to the industry and introduce a cap on the cost of payday loans on the amount borrowed per day.