Wonga ‘near collapse’

Getty Images

Payday lender Wonga has said that it is proposed, taking into account the “all options” according to reports, it was on the verge of collapse.

There is a rise in compensation claims against the company, in the midst of a government crackdown on payday lenders.

According to Sky News, the company lined up Grant Thornton to act as administrators in the event that he becomes insolvent.

He said the ailing company would take a decision on his future within weeks.

Once Britain’s biggest payday lender Wonga faced criticism for its high cost, short-term loans, said to be some targeted, vulnerable.

In 2014, the Financial Conduct Authority found that the pay of their debt collection practices were unfair and ordered him to compensate £2.6 m to 45,000 customers.

Because payday loan companies is considering tougher rules, and have capped their fees.

This is the case Wonga profits hard, and in 2016 it will be posted pre-tax losses of almost £65m, despite claiming his business was transformed””.

It has complaints continue to face legacy and was forced to the rescue of its supporters this month in the midst of an increase in receivables.

A Wonga spokesman said: “Wonga recently £raised 10m from existing shareholders to eliminate the significant increase in legacy loan complaints in the UK short-term credit industry.

“Since then, the number of complaints in connection with UK loans before the current management team is entered in the year 2014 has accelerated further, driven by the claims management company.

“Against these claims, the scenery, the Wonga board continue to all options regarding the future of the group and all of its facilities rate.”

According to Sky, the company is exploring the possibility of a pre-pack administration process-similar to that recently from House of Fraser.

However, it could also look to sell assets, including its Polish subsidiary, to strengthen the liquidity.

The Board of management of the company is likely to decide his future in the coming weeks, sky reported.