Google bans payday and high-interest loan ads
Recently, Google announced that it will no longer accept ads for payday loans requiring repayment within 60 days. The ban does not cover standard loans such as mortgages, car or student loans. It does however include other high interest loans:
“In that vein, today we’re sharing an update that will go into effect on July 13, 2016: we’re banning ads for payday loans and some related products from our ads systems. We will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the U.S., we are also banning ads for loans with an APR of 36% or higher. 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.”
The move was praised by Wade Henderson, CEO of The Leadership Conference on Civil and Human Rights, who told Google, “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.”
After some analysis, it looks the ban will cost Google millions of dollars every year:
“We found there were 4,211 advertisers who collectively spent $34.5 million sponsoring 726 payday loan keywords on U.S. Google desktop search last year, at an average cost per click of $5.32. (Mobile search was not included in the study.)”
Google’s ban on ads for payday loans that require repayment within 60 days is global. In the US, ads promoting high-interest loans with an APR of 36 percent or higher will not be allowed to run in the US. The changes take effect on July 13, 2016.