Grant Thornton to be administrators to Wonga
31 Aug 2018
Pay day lender Wonga has announced it is in the process of appointing Chris Laverty, Daniel Smith and Andrew Charters of Grant Thornton UK as joint administrators, which has collapsed after a raft of compensation claims hit its business
31 Aug 2018
In a notice on its website Wonga said: ‘A decision has been taken to place Wonga Group Ltd, WDFC UK Ltd, Wonga Worldwide Ltd and WDFC Services Ltd into administration.
‘The boards of these entities have assessed all options regarding the future of the group and have concluded that it is appropriate to place the businesses into administration.’
The announcement also stated that 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.
Wonga’s overseas businesses continue to trade. The lender has operations in Poland, South Africa and Spain, which are not part of the administration.
In a statement on the development, the Financial Conduct Authority (FCA) said: ‘The FCA will continue to supervise Wonga once it is in administration and is in close contact with the proposed administrators with regard to the fair treatment of customers.
‘Customers should continue to make any outstanding payments in the normal way. All existing agreements remain in place and will not be affected by the proposed administration. However, the firm is no longer able to issue new loans.’
Set up in 2007 as an online source of short-term loans, Wonga has been the subject of considerable criticism from MPs and lobby groups over its high rates of interest and its treatment of vulnerable borrowers.
In 2014 the FCA brought in tighter regulations for the pay day lending sector as a whole, which included a cap on rates and a ban on rollover loans. It also required Wonga to pay compensation of £2.6m to around 45,000 customers for unfair and misleading debt collection practices. Since then, the firm has faced an avalanche of claims for compensation.
Report by Pat Sweet