Google can’t stop you from searching for “payday loans,” and the company’s search engine will continue to turn up results for people inquiring about these short-term, high-interest loans, but it can choose to stop running ads for payday lenders.
Starting July 13, the search engine will ban all ads for payday loans and some related products from our ads systems as apart of an updated AdWord policy unveiled on Wednesday.
Specifically, Google says it will no longer allow ads — in the U.S. — for loans where repayment is due within 60 days of the day the loan is issued, or those that come with an annual percentage rate of 36% or higher.
“This change is designed to protect our users from deceptive or harmful financial products,” David Graff, Google’s director of global product policy, said in a blog post, noting that the policy will not affect companies offering loans such as mortgages, car loans, student loans, commercial loans, and credit cards.
The company says the policy update was made after reviewing its current policies and research that has shown payday loans and similar products can result in unaffordable payments and high default rates for users.
“Ads for financial services are a particular area of vigilance given how core they are to people’s livelihood and well being,” Graff said in the blog post.
Google, which has a set of policies to keep bad ads out of its systems, says it disabled more than 780 million ads in 2015 for reasons ranging from counterfeiting to phishing.
Consumer advocates and financial reform groups were quick to applaud Google’s ban of payday loan ads.
“As a leading search engine and innovator, Google’s announced updated policy on financial services advertising is a major consumer coup,” Keith Corbett, executive vice president of the Center for Responsible Lending, said in a statement. “By removing ads that lure financially challenged consumers into long-term and costly debt traps, Google is displaying what corporate citizenship looks like. Our hope is that others will soon follow suit.”
Other advocates say that consumer facing financial difficulties often turn to search engines for help. When these queries result in ads for payday loans and other potentially harmful products, it puts consumers at even more risk.
“Consumer trust is critical for success in the digital world, which is why online businesses need to demonstrate that they’re capable of protecting all users, including low-income communities that are the targets of online predatory lending schemes,” Michael Conner, executive director of Open MIC, said in a statement. “By banning ads for payday loans, Google is highlighting how corporate accountability can be a positive for the company, its shareholders and society.”
Americans for Financial Reform says Google’s ban closes off an important avenue of customer recruitment for the payday loan industry.
“We urge Microsoft, Yahoo, and other companies to follow Google’s example, adding their weight to efforts by communities, consumer advocates, and regulators including the Consumer Financial Protection Bureau to end the abuses of a quarter-century-long wave of triple-digit-interest, predatory consumer lending,” the group said in a statement.