Google has announced today that it will no longer support advertisements for a host of lending products that could be considered predatory.
This includes "payday loans", which have 60-day repayment deadlines and are saddled with high rates of interest.
An update in its AdWords terms and conditions means that, from July 13, these financial "services" will not feature on any of its online channels globally. In the US, loans with an annual percentage rate (APR) of over 36% are being phased out.
David Graff, director of Global Product Policy at Google, explained:
"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)".
Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, praised the move:
"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".
These loans join firearm and tobacco adverts on Google's banned list.
There are no payday companies in Ireland. While the Central Bank states that there is no official policy against them, there is an incredibly stringent application process facing any prospective lender who wants to legally charge over 23% APR.
We are something of an anomaly in this regard, as the US, UK and many European countries have many companies charging between 700% and 900% interest.
In December 2014, new UK regulations saw payday lender Wonga's APR cut from a staggering 5,853% to 1,509%.
According to John Oliver's Last Week Tonight look at the $9 billion industry, there are more payday loan outlets in the US than Starbuck's and McDonald's.
