Today, Google announced an update to its AdWords program. The company will no longer show advertisements for payday loans. The exact rules laid out by Google will remove ads for loans where repayment is due within 60 days or loans which have an APR of 36% or higher. These new rules will go into effect on July 13.
This new policy is stated to be a way to protect people from "harmful products." The post states, "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." Google's blog post also quotes Wade Henderson, CEO of The Leadership Conference on Civil and Human Rights, who praises the policy change by stating, "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."
Google has already drawn criticism from online lenders over this move. Kirk Chartier, chief marketing officer of online lender Enova, criticized the policy change by stating, "It's disappointing that a site created to help give users full access to information is making arbitrary choices on the advertisements users are allowed to see from legal businesses." However, Chartier added that he did not think Enova's business would be significantly impacted by Google's new policy.
Lisa McGreevy, CEO of the Online Lenders Alliance, had even harsher words for Google. "To make an advertising rule that contravenes state and federal law is not only disturbing, but it's discriminatory," she stated. "A certain class of people who wouldn't otherwise qualify for regular credit now can't get credit ... It's them (Google) deciding who can and cannot have information about credit."
Is Google protecting its users by banning advertisements for payday loans? Is there any merit to the argument that this is a discriminatory action by Google? Leave your comments below.