Google has announced that it will ban ads for payday loans because they can be “misleading or harmful.”
The ban, which takes effect globally from July 13, will cover loans that may be due within 60 days and, in the United States, loans with an annual interest rate of 36% or more. .
In a blog post, Google Public Policy Director David Graff wrote: “Research has shown that these loans can lead to unaffordable payments and high default rates for users, so we will update our policies. globally to reflect this.
“This change is designed to protect our users from deceptive or harmful financial products.”
The ban will not cover mortgages, auto loans, student loans, business loans or credit cards, Graff said, adding, “We will continue to review the effectiveness of this policy, but we hope less. people will be exposed to harmful products.
In a quote accompanying the announcement, Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights, said, “This new policy addresses many of the long-standing concerns shared by the broader community of human rights. civil rights regarding predatory payday loans.
“These companies have long used astute advertising and aggressive marketing to trick consumers into shockingly high interest loans – often those who can least afford them.”
Payday loans have come under scrutiny in recent years after an explosion in short-term lending following the financial crash of 2008. Problems faced by some people in meeting their payments have raised concerns in the Kingdom. United and the United States.
In 2014, stricter regulation was imposed on the industry in the UK, subjecting the market to regulation by the Financial Conduct Authority.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, which represents payday lenders, said Google’s move would affect people’s freedom of choice.
“UK consumers benefit from a vibrant and highly competitive credit market and we will be interested in reading the evidence Google is using to justify rejecting free market advertising from a legal and regulated industry to deny people freedom. of choice, ”he said.
“Short term loans are a legal source of credit used by millions of people across the UK and the industry is highly regulated with a cap on the total cost of credit. Under such scrutiny, dishonest companies have been driven out of the market, and reputable lenders will only lend to people who can afford to borrow.