THE UK-BASED payday lender Wonga has lost its bid to continue trading, as it has confirmed it has fallen into administration.

It comes amid a wave of compensation claims after the British government cracked down on high-interest lending a number of years ago.

After assessing all possible options, administration was chosen as the most appropriate route, the company said.

For customers who still have loans with Wonga, however, they will have to continue making repayments while the company is in administration. 

“Customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications,” it said.

The Financial Conduct Authority said in a statement: “The FCA will continue to supervise Wonga once it is in administration and is in close contact with the proposed administrators with regard to the fair treatment of customers.

Customers should continue to make any outstanding payments in the normal way. All existing agreements remain in place and will not be affected by the proposed administration. However, the firm is no longer able to issue new loans.

It said that Grant Thornton would act as administrators for Wonga.

Wonga has declined rapidly since a clampdown on high interest lenders from the UK government a number of years ago.

Critics had claimed that services such as Wonga targeted vulnerable people with their high interest rates.

Problems began to arise in 2014, when the UK government introduced regulations restricting the rates lenders could charge.

Furthermore, the Financial Conduct Authority ruled that some of its debt collection practices were unfair to consumers.

Previously, it could charge interest rates of up to 5,800%.

After the crackdown on high interest lending, the company agreed to pay €2.6 million in compensation to 45,000 after sending legal letters from fake law firms. It also wrote down the debt of 330,000 customers, wiping £220 million of debt.

The company previously had an office in Dublin, but shed 175 jobs there in 2015.