Google follows Facebook in banning payday loan ads
Google, the search engine company of Alphabet Inc GOOGL,
, on Wednesday announced plans to ban ads from payday lenders.
This decision comes after pressure from outside groups. More than 200 members of a coalition led by the Leadership Conference on Civil and Human Rights voted unanimously in December 2013 to urge states, Congress and federal agencies to increase regulatory oversight and enforcement of lenders on salary. The announcement is the culmination of a collaboration between Google and the coalition in recent months according to a press release released on Wednesday.
David Graff, director of global product policy at Google, said in a blog on Wednesday that the site would ban ads for loans that are due within 60 days of the date of issue. In the United States, Google will also ban ads for loans with an APR of 36% or more. “This change is designed to protect our users from deceptive or harmful financial products,” Graff wrote. “We have a comprehensive set of rules to keep bad ads out of our systems and we take these rules very seriously. In particular, financial services is an area that we are taking a very close look at because we want to protect users from deceptive or harmful financial products. “
Alvaro Bedoya, executive director of the Center on Privacy & Technology at Georgetown Law, said in the press release that the internet should not be a place that takes advantage of the weaknesses of the public. “If you’re broke and looking for help on the Internet, you shouldn’t be struck by ads for payday lenders charging 1,000 percent interest.”
Other products that Google has banned from advertising include “dangerous products and services,” a category that includes firearms, tobacco, explosives, and recreational drugs. A recent report from Upturn titled “Led Astray” notes that payday loan research ads are ubiquitous online, even when states have banned payday loans. This change does not affect search results, only the type of provider that Google is willing to accept as an advertising partner. If a user types in any keywords that search for a payday lender, this result will always appear.
The coalition also contacted Yahoo US: YHOO
and Microsoft MSFT,
that still allow payday loan announcements, but Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, said there had been no response. Facebook FB,
already prohibits advertisements for payday loans, payday advances or any other short-term loan intended to cover a person’s expenses until their next payday. Google’s action comes as the Consumer Financial Protection Bureau prepares to issue payday lending regulations. A CFPB regulatory proposal notice is expected this summer, and a final rule could be published in early 2017.
A spokesperson for the Community Financial Services Association, the industry’s trade group, told MarketWatch in a statement: “These policies are discriminatory and constitute a form of censorship. Google, Facebook and others are doing a holistic assessment of the payday lending industry rather than singling out the good players from the bad players. This is unfair to those who are legal and licensed lenders and follow best business practices, including CFSA members. Companies that restrict the advertising of payday loans are also doing their users a disservice, as consumers may need access to short-term credit that they cannot get from traditional banks. Thirty-five states and the CFPB have recognized the need for short-term credit products like payday loans. “
A Yahoo spokesperson provided this statement: “Our advertising policies provide guidance on the types of ads acceptable on our platforms, and we expect our advertisers to comply with all laws, regulations and our policies. To the extent that we become aware of advertisers who violate our rules, we investigate and take appropriate action. “
Microsoft did not respond to requests for comment.