Google is putting a global ban on advertisements for payday loans on its site in a move designed to protect users from "deceptive or harmful financial products".
The ban, which comes into effect on 13 July, means that the world's most visted site will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the US, banner ads for loans with an APR of 36% or higher will also be axed.
David Graff, director, global product policy, Google, says in a blog: "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."
Wade Henderson, CEO, The Leadership Conference on Civil and Human Rights, welcomed the move, saying: "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."
However, Lisa McGreevy, CEO, Online Lenders Alliance, has hit out at Google: "The Federal Reserve Board noted last year that 47% of Americans are not prepared to handle a $400 unexpected expense. This is yet another tactic that further limits the ability of families to have access to credit to fulfill their financial obligations.
"Limiting their access to the financial system will only exacerbate their problem. This unprecedented abuse of power by a monopoly player should concern lawmakers at both the state and federal levels."