Payday Lenders Getting the Cut From Google
Google has recently announced that they will ban all ads related to payday lenders after receiving concerns from critics. They argue that these lending practices exploit the vulnerable and the poor, offering them immediate money only to find out that the paybacks involve a skyrocketed interest. This is the first in a long time since Google made such a prohibition. Up to this point, they banned ads such as gun selling along with drugs and explosives, and limited the sexually explicit content.
Google Search Still Allows Payday Lenders
If you are specifically looking for payday lenders on Google, they will still be available for you in the search engines. The ban only applies to the ads that appear on the top right of search results. The goal is to prevent people from being misled by the harmful or baffling products that keep appearing, and it will be put in motion starting with July 13.
The policy effectiveness still remains to be reviewed. Since many cases of payday lenders were forced to refund millions of dollars to their customers due to irresponsible lending, Google is hopeful regarding this action. A large number of low-income employees used the short-term loans to get their hands on some quick cash which they could pay on their next paycheck, but they ended up getting caught in a dangerous circle where the fees and annual rates can go up to triple digits.
Going into Debt
Problems regarding the payday lenders appear constantly online. If one person is searching desperately for a payday lender, ads will start appearing. Those ads will only take advantage of those people’s weakness, leading them to financial risks. According to an analysis done by the US Consumer Financial Protection Bureau, at least half of the people who took payday loans were faced with $252 worth of penalties or bank fees. It was a pay they simply couldn’t afford.
Google’s attempt is to limit the pressure from coalitions of civil liberties, as well as to improve civil protection.
This new policy was set to protect the consumers against the payday lending predators. Many people with low income have fallen prey to the slick advertising, being caught in really high-interest loans that are way above their paycheck. To help with this policy, Google won’t display ads that charge interest rates going above 36% in the US. At the same time, those who look for such services through Google will be asked to disclose the annual interest rate and the length of the loan.
Even so, some advocates still argue that banning payday lender ads will not be enough. If the search engine detects terms that indicate a financial distress, you will still see ads for marketing companies that will collect the leads and send them off to the payday lenders.