Payday loan company Wonga just collapsed

Get out your tiny violins

Payday loan lender at extortionate rates Wonga has collapsed into administration after it was overwhelmed by a surge in complaints by former customers. It received a £10 million cash injection to save the company from entering insolvency only last month. The company had previously announced that it would no longer be accepting new loan applications as it neared collapse. In a statement released on Thursday, Wonga said: “A decision has been taken to place Wonga Group Limited, WDFC UK Limited, WongaWorldwide 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.” Wonga was previously the biggest payday loan lender in Britain but faced criticism for its high-interest rates targeting vulnerable people. Wonga was formed in 2004, quickly becoming one of the most recognisable payday loan companies in the country, thanks in part to their shirt sponsorship of various football teams such as Blackpool, Hearts, and Newcastle. Prior to the introduction of tighter financial regulations its annual percentage rates (APRs) reached up to 5,800%. In 2014, the firm wrote off £220million worth of debt belonging to 330,000 customers after admitting to handing out loans to customers who could not afford to repay them. Customers have been told to continue making payments on any outstanding loans.