Payday lenders 'have a year to clean up their act', says their new troubleshooter It drew 29 complaints that it was irresponsible because it focused on Ms Katona's financial problems and encouraged people in similar situations to borrow money. The ASA also challenged whether it was misleading and irresponsible because it promoted itself as an alternative to banks while offering an interest rate in excess of 2,000pc. Cash Lady said Ms Katona was selected because she had experienced money troubles and its customers would be able to relate to her. Jo Swinson, the consumer minister, said that although she was pleased to see independent monitoring put in place by payday lenders, the industry as a whole needed to go much further to prevent poor practice. "Government and regulators are fully committed to clamping down on irresponsible practices by payday lenders," she said. The new compliance board, called the Short-term Lending Compliance Board, has been set up by the payday lending trade body, the Consumer Finance Association (CFA). However, it will apply only to lenders that are members of the organisation, or apply to join, rather than the entire industry. The board will monitor firms, using the accountants KPMG as well as "naming and shaming" lenders that do not comply with the CFA's code of practice. Members include Cash Converters, the pawnbroker Albermarle & Bond, Quick Quid and The Money Shop. However, Wonga, the best known short-term lender, is not a member of the organisation, and neither are many smaller payday loan providers, which will therefore not be covered by the self-regulation scheme. Mr Fortescue, speaking exclusively to The Sunday Telegraph, said he would take a zero-tolerance approach to bad practice. "We shall pay particular attention to issues such as proper credit appraisal, preventing repetitive borrowing, transparency of charges and fair treatment of customers in financial difficulties," he said. He said self-regulation in industries could work, as long as it was done well. He is currently chairman of the Portman Group, funded by the drinks industry, which is the self-regulating social responsibility group for alcohol providers.