UK-based peer-to-peer (P2P) lender Funding Secure has collapsed following widespread defaults.

The Financial Conduct Authority (FCA), the domestic financial regulator, has placed the firm into administration.

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It has also appointed CG Recovery as the administrators, which has taken over the operations of Funding Secure.

As the administrator, CG Recovery will communicate with the affected investors and facilitate the return of capital and interest.

Funding Secure facilitated crowd funded loans for purchasing and development of property. It also offered pawn-broking style loans.

According to media sources, Funding Secure landed in trouble after several of its customers failed to return the borrowed money. Nearly 3,500 customers have invested around £80m in the P2P lender. The investment is spread across 486 loans.

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Quoting the administrators, the Funding Secure website says: “Due to the early stages of the administrations, the information we have is limited, we therefore request that creditors continue to consult the website and historic investor updates in the first instance.

“We will continue to update investors and creditors as additional information becomes available so please watch this website for updates.

“The business and affairs of the Company are now controlled by the Administrators who act as agents of the Company and act without personal liability.”

Funding Secure is the second P2P lender to fail in the last six months. In May this year, property lender Lendy failed following a surge in borrower defaults.