Payday lender Wonga has collapsed into administration.

Following the collapse on Thursday, the 200,000 customers still owning a combined total of £400 million were told to keep making payments.

The Financial Conduct Authority said: “Customers should continue to make any outstanding payments in the normal way. All existing agreements remain in place and will not be affected by the proposed administration.”

Wonga has long been a controversial short-term lender, where interest rates rocketed to as high as 5,853 percent before the government capped them at 1,500 percent.

A spokesman for the Financial Ombudsman Service said: “We are aware of the recently announced news about Wonga’s administration. Due to the nature of the business, there is no protection offered to consumers under the Financial Services Compensation Scheme (FSCS) in this instance.”

“Once the administrators have been appointed, we’ll speak to them urgently to clarify the impact on the cases we have with us and whether we’ll be able to work any new cases brought to us after today. We do not yet know what, if any, funds will be available to settle complaints.”

The collapse of Wonga will put almost 500 jobs at risk.

The group raised an emergency £10 million from shareholders in August but the surge of compensation claims swung the group into heavy losses.

Jonathan Reynolds, the shadow economic secretary, did not express sadness at the company’s administration.

“Its business model was exploitative and immoral. Wonga had become a testament to so much that is wrong with our economy – too many people stuck in insecure employment reliant on short-term debt just to keep their heads above water.”

“We need urgent action from the government to change this broken model and review the way lending is regulated.”

Martin Lewis, the founder of MoneySavingExpert, said: “Normally when firms go bust, the fear is diminished competition. Not here. Wonga’s payday loans were the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive. Its behaviour was immoral, from using pretend lawyers to threaten the vulnerable, to pumping its ads out on children’s TV.”