Is this the end of the Wonga puppets? Government threatens ban on adverts for payday lenders Elderly people, students and children targeted by TV promotions New regulator threatens a ban if lenders do not mend their ways Cash Lady ad featuring Kerry Katona singled out because she has been declared bankrupt herself But there will no ban on sky-high interest rates despite charity warnings Payday loan firms could be banned from advertising if they do not mend their ways, it emerged today. The likes of the Wonga women puppets and Cash Lady adverts featuring Kerry Katona could disappear from screens if the controversial companies continued to target students and the unemployed with adverts for their services, the new financial regulator said. But more drastic action - such as banning payday loan firms such as Wonga from charging sky-high interest rates - will not be taken. Advert: Puppets of elderly people feature in promotions for Wonga, which charges interest rates of 5,000 per cent The 50 leading companies were summoned for talks in Whitehall yesterday with consumer affairs minister Jo Swinson amid mounting concern that there are driving desperate families to financial ruin. Campaigners say the interest rates - which can top 5,000 per cent a year - are the root cause of the misery suffered by hundreds of thousands of people taking out the loans. Consumer group Which? published a study claiming that almost 1million people are forced to take out the high-interest loans to get by - with many using them to pay for essentials such as food and fuel. After the meeting yesterday, the chief executive of the new Financial Conduct Authority said he was concerned with the sorts of adverts that payday loan firms put out. One advert cited by Martin Wheatley was by former Atomic Kitten star Kerry Katona for Cash Lady, which he said was inappropriate because she had been declared bankrupt herself. He said an advertising ban was one of the options it was considering as it prepared to take on the regulation of the industry from next April. "Clearly that is an option that could be considered if it was felt that the way that advertising was being used couldn't be dealt with through any other measures short of that," he said. Warning: Cash Lady ads featuring former pop star Kerry Katona were singled out by regulators for being irresponsible I think there are lots of problems with advertising - that is one element that has been commented on, the targeting of young people, students, children in some cases. If payday loan companies are genuinely targeting a particular income bracket - people with jobs - why do they advertise on daytime television? Also attending the summit were regulators and charities, many of whom accuse payday loan firms lending to people who cannot afford to repay, and then saddling them with exorbitant rates of interest. Treasury Minister Sajid Javid said the takeover by the FCA would mark a "step change" in the regulation of the industry. They now have to deal with a regulator with some real teeth. They are going to feel the hand of the regulator on their shoulder and they better get used to it," he said. If there is any evidence of irresponsible lending, bad practices, rogue lenders, the regulator has a very important power independently to intervene in that market and to change the rules. Even to get authorised under the new regime the regulator will look into every pad day lenders' business model, satisfy itself that it is happy with that business model, it is sustainable, it is sensible, it is responsible. The meeting at the Department for Business, Skills and Innovation comes after the Office of Fair Trading (OFT) announced last week that it was referring the £2billion industry to the Competition Commission. The OFT said that consumers who could not afford to pay back their loans on time were finding themselves trapped with one firm when their loans are rolled over. It is also worried that firms are emphasising the speed of the loan over cost and that the pressure to hand loans out quickly may encourage lenders to "skimp" on affordability checks. It said some firms' business models appeared to be based around customers taking out loans which they are forced to roll over because they cannot afford them. Up to half of lenders' revenues were found by the OFT to come from the extra charges and interest coming from loans being rolled over.