Payday lender Wonga has said it will stop accepting new loan applications as the group hovers on the brink of collapsing.
The UK’s biggest payday lender has been attempting to find investment to keep itself afloat after being on the edge of collapse for weeks.
In a statement on the website, the group wrote: “While it continues to assess its options, Wonga has decided to stop taking loan applications. If you are an existing customer, you can continue to use our services to manage your loan.”
The short-term lender has called upon the accountancy firm Grant Thornton to handle the possible administration of the group.
A Wonga spokesman said last week: “Wonga recently raised £10 million from existing shareholders to address the significant increase in legacy loan complaints seen across the UK short-term credit industry.”
“Since then, the number of complaints related to UK loans taken out before the current management team joined in 2014 has accelerated further, driven by claims management company activity.”
“Against this claims backdrop, the Wonga board continues to assess all options regarding the future of the group and all of its entities.”
In 2014, the controversial lender was ordered to pay £2.6 million to compensate 45,000 customers by the Financial Conduct Authority.
The compensation hit Wonga’s profits the group posted pre-tax losses of nearly £65 million in 2016.
Loans are still advertised on the website, with a rate of 0.8 percent a day. This is the maximum that a short-term lender is able to charge after the Financial Conduct Authority introduced a cap on payday loan costs in 2014.