Wonga goes bust
It’s finally over for UK payday lender Wonga as the firm has entered administration.
As reported on 28 August, Wonga was close to collapse. At that time, sources such as the BBC and ITV said the firm was “considering all options” just weeks after shareholders pumped £10 million in a bid to save it from going bust.
Now its demise is official.
On its website, the company says: “A decision has been taken to place Wonga Group Limited, WDFC UK Limited, Wonga Worldwide Limited and WDFC Services Limited 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. Chris Laverty, Daniel Smith and Andrew Charters of Grant Thornton UK LLP are in the process of being appointed as joint administrators.
“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. Wonga’s overseas businesses continue to trade and are not part of this announcement.”
The firm was often criticised for its high interest charged. Figures vary over time – depending on who you read. Its annual percentage rate was at 4,214%, 1,509%, and other high numbers.
In 2014, the UK’s Financial Conduct Authority (FCA) found that Wonga’s debt collection practices were unfair and ordered it to pay £2.6 million to compensate 45,000 customers.
Rules were tightened and charges were capped. In 2016, following this, Wonga revealed pre-tax losses of nearly £65 million.
Loans will need to be paid back. Instead of owing Wonga, users will be paying the new creditor.
There was little sympathy from Twitter users about Wonga being no longer.
Comments ranged from “So loan sharks #Wonga have gone under? Good.” to “Lol rot in hell”.