The payday lender PiggyBank has collapsed, making it the latest short-term creditor to fail in recent weeks amid a fresh crackdown by the City regulator.
HJS has been appointed to carry out the administration of PiggyBank’s parent company, DJS, leaving about 45,000 customers facing financial uncertainty.
PiggyBank was forced to stop trading in July after the Financial Conduct Authority (FCA) raised concerns about poor affordability checks. The lender, one of the UK’s 10 largest payday operators, was forced to carry out an assessment to make sure it was lending to customers who could pay back their loans.
Administrators did not go into detail about the cause of the company’s collapse. However, the Guardian understands that PiggyBank’s financiers – most of whom were high net worth individuals – were not willing to put more funds into the company after the suspension was lifted in September.
It is not clear how much money customers who lodged compensation claims over issues including affordability will receive after the company is wound down.
PiggyBank offered loans of up to £1,000 to new customers for up to five months. A PiggyBank customer would pay an interest rate equal to an annual percentage rate (APR) of between 1,255% and 1,698%.
The company’s failure comes weeks after the UK’s largest payday lender, CashEuroNet, collapsed in October, taking its brands QuickQuid and On Stride off the market. Weeks later, another payday lender, 247MoneyBox, was put…