PAYDAY lender Wonga has collapsed into administration and stopped taking new loan applications.
The firm has appointed administrators to take within the running of the business and existing customers are being advised to carry on re-paying the money they owe.
In a statement, Wonga said: "The Boards of these entities have assessed all options regarding the way forward for the Group and also have concluded that it's appropriate to place the firms into administration."
Wonga was processing a large number of compensation claims from borrowers accusing it of irresponsibly lending, targeting vulnerable customers and charging sky-high interest back in 2023.
It was kept afloat three weeks ago because of a lb10million emergency cash injection from shareholders.
But Wonga said the money injection only led to an influx of recent claims and also the firm has been not able to cope with the demand.
This morning Wonga announced it has stopped lending to new customers and said existing customers should "continue to use our services to handle your loan".
Grant Thornton continues to be appointed to do something as administrator just days following the company held emergency talks with the Financial Conduct Authority (FCA) over the impact of its collapse on existing customers.
In 2023, the firm introduced a new management team and wrote off lb220million worth of debt owned by 330,000 customers after admitting providing loans to people who could not repay them.
In the same year, the FCA said hello would bring in stricter affordability checks towards the industry and introduce a cap on the cost of payday loans.
The rules created by the FCA four years ago also affected other payday lenders.
Recently the firms were slammed by claimant experts for "dragging their feet" over handing over payouts.
Vincent Vernon from Payday Refunds said it is dealing with 32,000 customers and claims a quarter which are with Wonga.
Read our help guide to finding out whether you're entitled to compensation and the way to claim the money.