Google Is Banning These ‘Deceptive’ and ‘Harmful’ Ads

Photo (cc) by taberandrew

Google is banning all payday loan ads.

The search engine announced that, effective July 13, it will prohibit advertising for payday lenders in an effort to protect users from financial products it describes as “deceptive” and “harmful.”

In a blog post announcing the payday loan advertising ban, David Graff, Google’s product policy director, wrote:

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 percent 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.

In theory, payday loans are short-term, high-interest loans intended to help Americans who need a little extra cash to tide them over between paychecks. Unfortunately, many borrowers end up extending the loans because they can’t pay them off in full. Meanwhile, excessive interest and fees continue to accumulate, trapping consumers in a deep cycle of debt.

I could go on, but basically, payday loans are bad news and most often hurt those who are least able to afford it.

Google said it disabled 780 million “bad ads” in 2015 for reasons ranging from counterfeiting to phishing.

The payday loan ad ban won’t affect companies that offer car loans, student loans, commercial loans, mortgages or credit cards.

Although ads for payday lenders will no longer be seen on Google as of July 13, you’ll still be able to find payday lenders through a Google search. Facebook also prohibits payday lending advertisements.

The Community Financial Services Association of America — a trade group for payday lenders — called Google’s new policy “discriminatory and a form of censorship.”

“Google is making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” trade group spokeswoman Amy Cantu said in an emailed statement. “This is unfair towards those that are legal, licensed lenders and uphold best business practices.”

The Consumer Financial Protection Bureau earlier this year proposed new regulations to rein in the payday lending industry.

I took out a few payday loans after college when I was making about $6 an hour and living paycheck to paycheck as a TV reporter. The interest rates and fees were so ridiculously high that after I paid the loan off, I was broke again and often forced to take out another payday loan. It truly was a vicious cycle, so I applaud any effort to rein in and regulate these predatory loans.

What do you think about Google’s decision to ban payday loan advertising? Sound off below or on our Facebook page.

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