Smart Borrower Blog

Google Puts the Kibosh on PayDay Loan Ads


May 11th, 2016 @ 12:04 PM by Amber Nelson


Google has decided to ban advertisements for payday loans on its search engine pages in an effort to protect its consumers, according to recent statements.

Payday loans, as defined by Google, are loans with an APR of 36 percent or higher and are due within 60 days of issuance. Google’s users will still be able to search for and find payday lenders online, but those lenders will no longer be allowed to purchase ads to appear above those results.

“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,” wrote David Graff, Google product policy director in a blog post. “This change is designed to protect our users from deceptive or harmful financial products.”

These advertisement policy changes will not affect the marketing of mortgages, student or car loans, credit cards or business loans.
Google’s decision comes on the heels of Facebook’s move to drop payday loan ads last August. Microsoft and Yahoo have not made any changes to their policies.

While consumer advocacy groups are rejoicing because of the new Google move, lenders are incensed, calling it “discriminatory and a form of cencorship.”

“The Internet is meant to express the free flow of ideas and enhance commerce. Google is making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” Amy Cantu, spokeswoman for the Community Financial Services Association of America, said in a statement. “This is unfair towards those that are legal, licensed lenders and uphold best business practices.”

Google has left the door open a little for allowing payday loans ads again in the future. “We’ll continue to review the effectiveness of this policy,” wrote Graff, “but our hope is that fewer people will be exposed to misleading or harmful products.”
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About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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