Is Britain’s biggest payday lender QuickQuid about to go the way of Wonga? Report claims the company is on the verge of administration
- Stricter payday loan rules were brought in by the FCA in 2014 and 2015
- Number of FOS complaints over QuickQuid have soared in last six months
- Report suggests QuickQuid could collapse within days
Britain’s biggest payday loan collapse since Wonga could be on the cards with QuickQuid on the verge of going into administration, according to reports.
The lender – which offers short-term loans with rates up to 1,300 per cent interest – could collapse within days, with Wonga’s administrators Grant Thornton lined up to do so the same job with QuickQuid, according to reports from Sky News.
It would mark another casualty in Britain’s payday loan market since the Financial Conduct Authority brought in stricter rules in 2014 and 2015.
This introduced greater affordability checks and capped the amount borrowers could pay back at double the amount they borrowed.
QuickQuid claims to have 1.4m customers and the number of complaints about it has grown massively in recent years
Wonga was brought down by a backlog of complaints from customers who claimed they had been mis-sold loans they could not afford to borrow, while since its demise it has been beset by even more people looking for their money back.
Its auditors Grant Thornton revealed in March more than 40,000 people who borrowed from Wonga were attempting to make compensation claims at the time it went bust, more than four times the number of claims initially expected.
Meanwhile, the number of claims made about QuickQuid has skyrocketed over the last few years.
According to statistics from the watchdog, the Financial Ombudsman Service, the number of complains about the beleaguered payday lender tripled from just over 1,500 in the last six months to 4,692 in the first six months of last year.
In total, more than 10,400 complained to the FOS about QuickQuid in 2018, helping drive a 130 per cent rise in complaints about payday lenders in 2018-19 compared to the previous financial year.
Peter Briffett, co-founder and chief executive of income streaming app Wagestream, said: ‘his is another nail in the coffin of the payday loans industry and a fantastic day for consumers.
‘Those under financial pressure are better informed and more financially literate than they’ve ever been and there has never been a wider variety of alternatives to payday loans available.’
QuickQuid is owned by US company Enova.
Its other UK payday lender – Pounds to Pocket – which changed to On Stride Financial, agreed to pay customers back £1.7million after failing to comply with the FCA’s new affordability tests.
Enova’s third-quarter results are due after the market close on Thursday. The company says it has provided more than 5million customers around the world with more than $20billion in loans and financing, while QuickQuid claims to have over 1.4million customers.
After Wonga went bust, QuickQuid’s managing director Nick Drew insisted in September its business was ‘profitable and growing, and we remain excited about the opportunities, especially in light of the diminished competition in the market’.
This is Money has contacted QuickQuid for comment, but has not received a response at time of publication.