Google decide to ban all payday loan ads from its site by adwords, bowing to conerns by advocates who cliam the lending practice make use of the poor and vulnerable by giving thme immediate cash that must be paid back with sky-high interest rates.
The decision is the first time Google has announced a global ban on ads for a broad category of financial products. To this point, the search giant has prohibited ads for largely illicit activities such as selling guns, explosives and drugs, and limited those that are sexually explicit or graphic in nature, for example. Critics of payday lenders say they hope the move by Google and other tech companies might undercut the business which finds huge numbers of willing customers on the internet.
The move also shows the willingness of big tech companies to weigh in on critical policy issues -- and exert their power as the gateways for the internet. Facebook also does not display ads for payday loans. But others, such as Yahoo, still do.
Consumers will still be able to find payday lenders from a Google search. But the ads that appear on the top and right-hand side of a search results page will not show marketing from the payday lending industry beginning on July 13.
"We’ll continue to review the effectiveness of this policy, but our hope is that fewer people will be exposed to misleading or harmful products," Google global product policy director David Graff said in a blog post about the change.
Washington regulators, as well as a handful of states, have been trying to limit the activities of payday lenders by capping how much they can charge consumers in an interest rate. But the decisions by tech giants Facebook and Google – the two biggest websites on the planet – might have as much impact as any single regulation in restricting access to payday lenders.
Industry officials, speaking generally of advertising restrictions placed on payday lenders, called the policies “discriminatory,” adding that some consumers may need access to the short-term loans if they can’t get credit them through a traditional bank.
“Facebook and others are making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” the Community Financial Services Association of America, a payday lending trade group, said in a statement. “This is unfair towards those that are legal, licensed lenders.”
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