QuickQuid 'on verge of collapse' as payday lender lines up administrators

Company has faced thousands of complaints about mis-selling of high-cost loans to customers who couldn't afford them

Sir Gerald Howarth has a consultancy role with payday lenders QuickQuid, which the OFT accused of 'widespread irresponsible lending' (Maurice Savage/Alamy)

Payday lender QuickQuid is on the brink of collapse, with administrators set to be called in within days, according to reports.

It would be the latest high-cost credit provider to go under in the wake of a crackdown by regulators.

Wonga went bust last year, leaving Cash Euro Net, which owns QuickQuid, as Britain's largest payday lender. Sky News reported that the company has lined up Grant Thornton as administrators.

An administration could make it difficult for thousands of customers who have complained about the firm to claim money back as they will be placed into a queue with other creditors.

Like Wonga, Quick Quid has faced a deluge of complaints from customers who say they were mis-sold payday loans.

Cash Euro Net is the UK's most complained-about payday lender with 10,409 disputes lodged with the Financial Ombudsman Service last year.

Almost two-thirds of those were upheld, leaving the firm with a hefty bill to redress customers. In 2015 it was ordered to pay £1.7m back to customers after failing to properly check whether they could afford the repayments on loans they were given.

Earlier this year, MPs said more than 10,000 people who may have been missold expensive payday loans by Wonga had been “cast aside”.

After Wonga collapsed, 10,500 customers were left with unresolved complaints at the Financial Ombudsman Service (FOS).

The situation “cannot be right”, said Nicky Morgan, chair of the House of Commons Treasury Committee, in a letter to the Financial Conduct Authority (FCA) at the time.

“These people have been left to fend for themselves by Wonga, the FCA and the FOS,” Ms Morgan said.

“They’ve been allowed to fall through the cracks with nobody taking responsibility for their mistreatment."

Many Wonga customers have received back just a fraction of the amount that they would have been due if the company had remained solvent.

QuickQuid is owned by New-York listed Enova International which is due to report financial results after markets close this evening.

The Independent has contacted CashEuroNet for comment.