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Wonga Payday Stops Offering New Loans Amid Fears of Collapse

on Friday, 31 August 2018
Wonga Loans

Payday lender Wonga has stopped offering new loans to customer amid speculation that the company is on the edge of breaking.

In a statement on its website yesterday (August 30), Wonga announced that it was no longer offering loans to new customers while assessing “its options”. Existing customers can still use their services to manage their current loans.

The news comes after an increase in compensation claims against the company following a crackdown on payday lenders by the government.

Sky News revealed last weekend that the company was working to avoid the risk of collapse within weeks and that the company received a whopping $10 million emergency cash injection to keep it afloat.

Teetering On the Brink of Collapse

New reports suggest Wonga, which launched in 2007, has lined up business services group Grant Thornton to act as administrator in the event of a collapse.

The company, which previously faced criticism for potentially targeting the vulnerable with its high-cost, short-term loans, has said it will make a decision about its future within the coming weeks.

On Wednesday (August 29), Wonga held emergency talks with the Financial Conduct Authority (FCA) over the impact of its collapse on existing customers.

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