Hundreds of payday lenders will be wiped out by tougher rules designed to protect customers , experts have predicted . It comes as Wonga , the UK ’ s biggest payday loans firm , today revealed it racked up a £37.3million loss last year following a significant reduction in UK consumer lending while it attempts to clean up its tarnished image . Revenues declined to £217.2million in the period , down by almost £100million . Wonga 's executive chairman Andy Haste said : 'We know it will take time to repair our reputation and gain an accepted place in the financial services industry , but we 're determined to deliver on our plans and serve our customers in the right way . ' Hundreds of payday lenders , such as Wonga , will be wiped out by tougher rules designed to protect customers , experts have predicted . The City watchdog has forecast that just three or four payday lenders out of 400 will be left standing following the introduction of the rules in January . They include a daily interest cap of 0.8 per cent and stricter affordability checks to ensure customers can repay loans . The true picture should become clearer later this year , as the Financial Conduct Authority ( FCA ) attempts to weed out dodgy firms . Payday lenders have all had to apply for a license to trade and will learn in the coming months whether they have been successful . Robin Savage , an analyst from investment bank Canaccord Genuity described some of the tactics used by payday lenders – such as extending loan terms and adding interest to customers who can not afford to repay - as ‘ evil ’ . He said : ‘ If firms can ’ t do proper checks and find customers that can repay them then they do not deserve to survive. ’ Wonga , has become a lightning rod for public fury over payday lenders . Last year it took a £35million hit from writing off debts worth £220million owed by more than 300,000 customers . It was also ordered to pay £2.6million in compensation after sending fake legal letters between 2008 and 2010 to 45,000 customers who had fallen behind on their repayments . The City watchdog has forecast that just three or four payday lenders out of 400 will be left standing following the introduction of the rules in January ( file picture ) A charge of almost £20million will be incurred by the firm to cover compensation as well as legal and administrative costs . Wonga has been accused of trying to lure youngsters to take out payday loans with its controversial puppet adverts . Its new chairman Andy Haste – brought in to clean up the business – has ditched the adverts and admitted that it will be smaller and less profitable under the new regime . The cap on the cost of loans has reduced Wonga ’ s annual interest rate from 5,853per cent to 1,509 per cent since the changes were enforced in January . This will not be reflected in the figures released today , which cover last year . But the losses will include redundancy pay-outs , as Wonga is halving its UK workforce , with the loss of 325 jobs . Today ’ s figures showed a slump in customers , after Wonga stricter affordability checks in October – ahead of changes enforced by the FCA in January .
Hundreds of payday lenders will be wiped out by tougher rules , say experts . It comes as Wonga today revealed a £37.3million loss for last year . City watchdog says just three or four lenders out of 400 will remain .