Google Bans 'bad' Ads For Payday Loans

(RTTNews) - Google, in a blog post on Wednesday, said it would ban ads from payday lenders and some related products, citing its policy to keep bad ads out of its systems.

Effective July 13, the company will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the U.S., the firm is also banning ads on loans with an annual-percentage-rate or APR of 36% or higher.

With the strict standard taken by Google, the ban will cover virtually all of the ever growing online payday-loan market, constituting roughly half of the payday-loan market.

The decision was taken after a research showed that such loans can result in unaffordable payment and high default rates for users.

The ban is designed to protect users from deceptive or harmful financial products, but it will not affect companies offering loans such as Mortgages, Car Loans, Student Loans, Commercial loans, Revolving Lines of Credit.

Google, now owned by Alphabet Inc., already bans ads for firearms and tobacco. In 2015 alone, Google said it disabled more than 780 million ads for reasons ranging from counterfeiting to phishing.

Wall Street Journal had reported that the federal Consumer Financial Protection Bureau is bringing out a rule to impose tough underwriting standards for the $38.5 billion payday-lending industry. Such lenders, who cater to some 12 million U.S. customers annually, offers small-dollar loans at interest rates that can exceed 300%.

Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, said, "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."