Payday lender Wonga has put itself into administration after talks with the regulator failed to save the firm from the brink of collapse.
Wonga raised £10m from shareholders four weeks ago but is still unable to meet outstanding compensation claims.
A source told The Times yesterday that the FCA was in talks with Wonga, formerly the UK’s largest online payday lender, over the expected appointment of administrators.
Grant Thornton will act as administrators.
Customers will be updated by Grant Thornton once Wonga is in the formal administration process.
Wonga has come under criticism for its annual interest rate charges of around 4,000 per cent and has struggled since the regulator’s crackdown on payday lending rules.
The London-based Marylebone-headquartered firm also faced difficulties in 2014 when it was fined over unfair debt collection practices.
The FCA is continuing its supervision of the firm and is in contact with administration over fair treatment of customers.
Although Wonga is not able to issue new loans, those with outstanding payments to the firm must continuing paying up as normal.
Wonga’s overseas businesses in Poland, South Africa and Spain will continue trading.