Google has announced that it’s no longer going to serve ads for payday loans as it has decided that it doesn’t want to promote predatory lending practices which have proven to be harmful to many people. In case you’re unaware, payday loans are short-term loans of small value that are usually due on the person’s next payday, very high-interest rates are associated with these loans if payments are not made in a timely manner and often they push people further into debt.
Google is going to ban payday loan ads globally from June 13th, it describes them as loans that are due within 60 days of being issued. In the United States, the company is also banning loans that have an annual interest rate of 36 percent or higher.
David Graff, director of product policy at Google, writes in a blog post that “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.”
Georgetown’s Center on Privacy & Technology worked with Google on this new policy and it says that payday lenders profit from people’s weaknesses, particularly people of color and people who are having trouble making ends meet. Every time someone clicks on ads for payday loans the search engines make a profit too, which is why bringing in Google was very important to this cause.
Google is the biggest online search engine, it’s far ahead of the competition, so a ban that it places is surely going to have a big effect. This also means that Google is no longer going to profit off other people’s misfortunes. The new policy is only limited to payday loans, the company is still going to serve ads for other kinds of loans, like car and student loans.