Google Adwords will be banning ads for so-called ‘payday loans’ and other lending at very high interest rates. As of July 13th, Google will no longer accept ads for loans that have to be repaid within 60 days, or any loan with an APR exceeding 36%.
The change was announced on Google’s Public Policy Blog.
When reviewing our policies, research has shown that these loans can result in unaffordable payment and high default rates […] This change is designed to protect our users from deceptive or harmful financial products.
Google also shared a stat on action taken against harmful ads in general …
In 2015 alone, we disabled more than 780 million ads for reasons ranging from counterfeiting to phishing.
Google has a team of more than 1,000 people working on pulling harmful ads. Other examples include non-approved drugs and ‘trick to click’ ads designed to look like system messages.
The move comes a few days after the company announced plans to reduce accidental touches on ads on mobile. You can read the full blog post below.
An Update to Our AdWords Policy on Lending Products
Wednesday, May 11, 2016
Posted by David Graff, Director, Global Product Policy
When ads are good, they connect people to interesting, useful brands, businesses and products. Unfortunately, not all ads are–some are for fake or harmful products, or seek to mislead users about the businesses they represent. We have an extensive set of policies to keep bad ads out of our systems – in fact in 2015 alone, we disabled more than 780 million ads for reasons ranging from counterfeiting to phishing. Ads for financial services are a particular area of vigilance given how core they are to people’s livelihood and well being.
In that vein, today we’re sharing an update that will go into effect on July 13, 2016: we’re banning ads for payday loans and some related products from our ads systems. 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. 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.
This change is designed to protect our users from deceptive or harmful financial products and will not affect companies offering loans such as Mortgages, Car Loans, Student Loans, Commercial loans, Revolving Lines of Credit (e.g. Credit Cards).
According to Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, “This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending. 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.”
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.