Google to restrict ads for payday loans – TechCrunch

Google announced today that it will no longer allow payday lenders to advertise on its systems, as loans often come with high interest rates and quick repayment requirements that push borrowers to get into debt.

Payday lenders offer quick cash to low-income people, who are then required to repay their loans within a short period of time. If they don’t, they face exorbitant interest rates and can quickly get into debt.

“When reviewing our policies, research has shown that these loans can lead to unaffordable payments and high default rates for users,” Google Global Product Policy Director David Graff wrote in a blog post announcing the policy change. “This change is designed to protect our users from deceptive or harmful financial products,” he added.

Google has banned ad categories in the past – it doesn’t allow ads for illegal drugs, guns, tobacco, and other products that don’t match the family image Google is trying to project . The company also prohibits advertisements that could be risky for its users; it announced that it had banned more than 780 million counterfeit and phishing-related advertisements last year.

Google will define payday loan ads as those that offer loans that are required to be repaid within 60 days or those that offer an APR of 36% or more. The policy will go into effect on July 13, 2016 and Graff has said it will not impact advertising for other types of loans, such as mortgages or student loans.

Advocates pushed Google to make the adjustment for a while and celebrated the announcement.

“If you’re broke and looking for help on the internet, you shouldn’t be struck by ads for payday lenders charging 1,000 percent interest,” said Alvaro Bedoya, executive director of the Center on Privacy and Georgetown Law Technology. “Today, the world’s largest search engine says, ‘We don’t want to participate in this.’ Google’s decision to ban these ads sets an industry standard that other internet companies would do well to follow.

Civil rights groups have lobbied against payday loans in government and the private sector, arguing that lenders disproportionately target people of color and prey on people’s desperation when they are found. in a difficult financial situation. About a third of states in the United States have laws against payday loans.

“Low-income people and people of color have long been the target of slick ads and aggressive marketing campaigns to trick consumers into shockingly high interest loans,” said Wade Henderson, President and CEO of The Leadership Conference on Civil and Human Rights. “This ban puts payday loans in their proper place alongside explosives and tobacco as dangerous products that deserve the highest level of scrutiny from regulators and businesses.”

Bedoya hailed Google’s move as a civil rights victory and said he hoped other major search engines operated by Yahoo and Microsoft would follow Google’s lead.

Google’s AdWords currently displays payday loan ads if a user searches for the phrase “payday loan” or other related queries. But after the July deadline, the ads will disappear completely. Payday loan information, however, will still show up in organic search results, but not in ads.

Correction: An earlier version of this story stated that users would continue to see advertisements for payday loans if they directly asked for phrases about such loans. Google will not display payday loan ads regardless of the query.

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