TWO payday lenders have gone bust leaving 650,000 customers in limbo over what to do about their loans.
The struggling lenders WageDayAdvance and Juo Loans are generally of the same parent company which filed for administration yesterday.
More than 50,000 Curo Transatlantic Limited (CTL) customers, including all Juro borrowers, happen to be sold to Shelby Finance, that is owned by Morses Club.
These customers will be notified they have been transferred within the next few days and repayments should continue as normal.
But 650,000 customers – including those who no longer possess a loan – will stay with CTL.
A spokesperson from administrators KPMG told The Sun that customers who make your loan payments with an agent should continue to do so.
Borrowers who repay debts via a direct debit or any other card payment won't cover the cost of payments as the administrators decide by what to do next.
In the meantime, all interest and expenses is going to be temporarily frozen, although it's not clear just how long for.
WageDayAdvance was processing a large number of compensation claims from borrowers who accused it of irresponsibly lending lb18million as a whole, by charging rip-off interest rates and targeting vulnerable customers.
Ed Boyle, from KPMG, said that the sale of area of the business was the "best available outcome" for CTL's creditors because of the circumstances.
He added: "Over time, along with the number of claims increasing, the financial and operational burden of resolving them became unsustainable.
"The Joint Administrators will now try to realise the rest of the assets from the Company and also to then distribute the accessible funds to creditors."
The firm's closure follows within the steps of Wonga which went bust in August last year for the similar reasons.
At least 1,930 WageDayAdvance customers have logged compensation complaints using the Financial Ombudsman however, there are potentially thousands more and also require launched claims directly with the firm.
Administrators are currently planning how to distribute the rest of the funds, although it's still not clear whether you will see enough cash to payback customers who've already submitted a compensation claim.
KPMG has additionally confirmed that it will be contacting old customers who it thinks it might be owed cash and encouraging these to submit a complaint.
If the process is anything like what happened to Wonga customers, nokia's will stop paying refunds immediately, including to people who have recently been agreed.
Complaints logged with the ombudsman will be passed to the administrators and customers are only prone to get a number of the refund they're owed.
It could take months before these claims are processed and payments made.
WageDayAdvance stopped lending to customers the other day, blaming technical problems on its website, based on Debt Camel.
Yesterday, the Financial Conduct Authority turned down an application from the firm to cap the amount it refunds customers.
Debt campaigner Sara Williams, who runs the Debt Camel, said: "WageDay Advance has given payday loans to hundreds of thousands of consumers, in many cases without making adequate affordability checks.
"These customers happen to be disappointed twice through the regulators in great britan.
"Wageday Advance was allowed to pull off irresponsible lending for a long time and now it's gone into administration, it is unlikely that individuals who've complained will get proper compensation for this."
Payday lenders happen to be slammed for dragging their heels over mis-selling payouts.
Here's our help guide to discovering whether you're entitled to compensation and how to claim the money.