Lender Amigo swung to a big loss in the last financial year despite attracting more than 200,000 new customers.
The business said it made a pre-tax loss of £37.9 million, compared with a £111 million profit the year before, on revenue of £294 million.
It came as the cost of dealing with complaints shot through the roof.
In the financial year ending March 31, complaints cost the business £126.8 million, compared with only around £100,000 in 2019.
Acting chairman Roger Lovering said: “We have seen a substantial increase in the volume of complaints and this has led us to make a significant provision, which resulted in an overall loss for the financial year.
The results come at a turbulent time for the guarantor lender, which provides money to borrowers who have a friend or family member who is willing to guarantee the loan.
Earlier this month, Amigo reached an agreement with the Financial Conduct Authority which gives it until October 30 to ensure that customers with complaints do not need to wait more than eight weeks before their claim is handled.
It came after the lender failed to meet an initial June 26 deadline.
The business had a backlog of around 9,000 complaints at the time.
Meanwhile, the FCA has launched a probe into Amigo’s creditworthiness.
Last month a potential buyer walked away from a deal to take over the troubled subprime lender, just weeks after telling shareholders it would pay £100 million for the business.
However, the unnamed bidder pulled out, citing “the current market environment”.
On Monday, Amigo’s board again stressed it believes the company can keep going.
It said: “The board considers there to be adequate liquidity to continue to support the ongoing business activity.”
Mr Lovering said: “The last 12 months have been a challenging and difficult period, which is reflected in our results today.
“We are operating against an evolving regulatory picture, while facing economic uncertainty due to the Covid-19 pandemic.”
The company announced separately that it has appointed Jonathan Roe to take over from Mr Lovering as the board’s chairman.
The veteran investment banker, who earned his stripes at Dresdner Kleinwort, said he is “delighted” with the new role after being chairman of Vanquis Bank for three-and-a-half years.
He added: “I do not underestimate the near-term challenges that Amigo is facing and fully recognise the uncertainties that many of our customers are currently facing too.”
Shares dropped 19% immediately as trading started on Monday morning following the news.