SAN FRANCISCO: Search giant Google Inc on Wednesday said it is banning advertisements for payday loans, quick money that comes with extremely high interest rates that can quickly plunge a borrower into financial distress.
“We are banning ads for payday loans and some related products from our ads systems,” starting on July 13, the company announced on an official blog.
Specifically, it is targeting loans requiring repayment within 60 days. In the US, advertisements for loans with an annual percentage rate of 36 percent or higher are also to be prohibited.
Payday loans are targeted at low-income people, providing ready cash that is repaid automatically from the next paycheck. However, borrowers often get sucked into a cycle of debt, due in part to interest rates that can reach the triple digits.
“This change is designed to protect our users from deceptive or harmful financial products,” the Google post said.
Advertisements for mortgages, car loans, student loans and credit cards are not to be affected.
Users who search specifically for payday loan companies are still to be able to see results for such businesses.
Rights groups applauded Google’s move.
“Low-income people and people of color have long been targeted by slick advertising and aggressive marketing campaigns to trap consumers into outrageously high interest loans,” said Wade Henderson, president and chief executive officer of the Leadership Conference on Civil and Human Rights.
“This ban puts payday loans in their rightful place alongside explosives and tobacco as dangerous products that deserve the highest level of scrutiny from regulators and businesses alike,” he added.
