Google today has vowed to ban all payday loan ads from AdWords.
Calling such ads “deceptive” and “harmful financial products,” Google announced the new global policy will take effect as of July 13.
“We will no longer allow ads for loans where repayment is due within 60 days of the date of issue,” Google said in a blog post. “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.”
Google said the policy update is a bid to protect users from scams, but will not harm legitimate companies offering mortgages, car loans, student loans, commercial loans and revolving lines of credit such as credit cards.
“We’ll continue to review the effectiveness of this policy, but our hope is that fewer people will be exposed to misleading or harmful products,” Google added.
The Community Financial Services Association of America (CFSA) is none too happy with Google’s decision.
In a statement to the media, the trade organization for companies that supply short-term loans or payday advances called the new policy a “form of censorship.”
“The Internet is meant to express the free flow of ideas and enhance commerce. Google is making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” the CFSA said.
“This is unfair towards those that are legal, licensed lenders and uphold best business practices, including members of CFSA.”