Wonga on brink of collapse after surge in customer compensation claims

Wonga received a cash injection of £10 million earlier this month

Payday lender Wonga is reportedly on the brink of collapse after a surge in customer compensation claims made against it. The company, which has been accused by protesters as being akin to loan sharks, could be taken over by professional services firm Grant Thornton if insolvency is found to be unavoidable, Sky News reports. It is believed that a cash injected received by the company three weeks ago prompted fresh claims from compensation claim management companies. Wonga, which used to be the shirt sponsor for Newcastle United, has in the past been forced to pay compensation for bad debt practices, including charging debtors for letters purporting to be from law firms which did not, in fact, exist. It has also been criticised by a number of politicians and the Archbishop of Canterbury Justin Welby, who referred to the company's high interest rates "shocking" and "usurious". It was later pointed out by the Financial Times that the Church Pension fund invested in Accel Partners, a venture capitalist firm which raised funds for Wonga in 2009.