Google will no longer allow advertising from payday loan companies, the company reported in a statement Wednesday.
The policy goes into effect on July 13.
“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% or higher,” the statement reads. “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.”
The change, according to Google, is to “protect our users from deceptive or harmful financial products” but will not affect standard loan offerings like car, mortgage or student loans.
So-called payday loans can potentially become financial disasters for people who are desperate for up-front money. Stephanie Banks, a Portland cancer survivor, took out a $300 loan, only to find out it had ballooned to $40,000, despite filing for bankruptcy. The interest rate on that loan was 153 percent.’
“This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending,” Google quoted Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights as saying. “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.”