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Google to ban ‘deceptive and harmful’ payday loan ads

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
21/02/2024

Google will refuse to accept cash from payday loan lenders for ad listings promoting short-term loans online from mid-July, although the search listings will be unaffected.

The search engine said that from 13 July, it would add ‘paid for’ payday loan ads and listings to its blacklist, which also includes guns, tobacco and drugs.

In a blog, David Graff, Google’s director of global policy, said: “We’re banning ads for payday loans and some related products from our ads systems. We will no longer allow ads where payment 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.”

He said research has shown that these loans can result in unaffordable payment and high default rates for users so Google would be updating its policies globally to reflect that.

The ban will not affect mortgages, car loans, student loans, commercial loans and other revolving lines of credit, said Google.

The move cuts off a crucial channel for many online-only lenders which short-term lending association trade body, the Consumer Finance Association (CFA) said was denying consumers ‘freedom of choice.’

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said: “UK consumers enjoy a vibrant, highly competitive credit market and we will be interested to read the evidence that Google uses to justify overruling open market advertising of a legal, regulated industry to deny people freedom of choice. 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 intense scrutiny the rogue firms have been driven out of the market and reputable lenders will only lend to people who can afford to borrow.”

The payday loan industry saw a regulatory clampdown in 2014 after evidence of widespread malpractice, including overly aggressive collections practices directed at struggling borrowers.

Google has a history of banning so-called ‘bad ads,’ including false advertising for pharmaceuticals, phishing, weight loss scams and unwanted software.