Payday loans and the advertising of some lending products just got a lot less Google-friendly.
Google announced that it has updated its AdWords policy to effectively ban advertisers from marketing a number of lending products starting July 13. This decision stems from the number of controversies surrounding pitches by financial loan services, particularly payday loan companies, that have been viewed as deceptive.
This ban by Google includes loans that have repayment dates that hit within 60 days of being issued. It also includes loans with an APR of 36 percent or higher in order to avoid promoting loans considered predatory.
"When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates for users, so we will be updating our policies globally to reflect that," David Graff, director of global product policy at Google, wrote in a blog post. "This change is designed to protect our users from deceptive or harmful financial products and will not affect companies offering loans such as mortgages, car loans, student loans, commercial loans, revolving lines of credit (e.g. credit cards)."
In the post, he stressed that good ads have the potential to connect consumers to "interesting, useful brands, businesses and products." But some ads, which could have deceptive or harmful messages or products attached to them, don't align with the type of ads that Google wants to enable on its site. Google disabled more than 780 million ads for various reasons in 2015, which included everything from counterfeiting to phishing.
"Ads for financial services are a particular area of vigilance given how core they are to people’s livelihood and wellbeing," Graff wrote.
Overall, Google is aiming to halt any ads that could link consumers to what it calls "misleading or harmful products," which Google has now defined as many of the payday lending products in the market.
"This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending. These companies have long used slick advertising and aggressive marketing to trap consumers into outrageously high interest loans — often those least able to afford it," Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, was quoted as saying in the post.