Google to ban payday lender ads from its site: Washington Post | HT Tech

Google to ban payday lender ads from its site: Washington Post

Google, which joins Facebook in blocking ads by payday lenders, announced its decision a day after the US Treasury suggested that online lenders support more transparency in their transactions

By: REUTERS
| Updated on: May 12 2016, 08:54 IST
image caption
Google, which joins Facebook in blocking ads by payday lenders, announced its decision a day after the US Treasury suggested that online lenders support more transparency in their transactions (Reuters)

Google, a unit of Alphabet said it would ban advertisements for payday loans as these "deceptive or harmful financial products" take advantage of vulnerable customers.

Google, which joins Facebook in blocking ads by payday lenders, announced its decision a day after the US Treasury suggested that online lenders support more transparency in their transactions.

You may be interested in

MobilesTablets Laptops
28% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
Vivo X100 Pro 5G
  • Asteroid Black
  • 16 GB RAM
  • 512 GB Storage
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage

Payday lenders, which offer small loans at high interest rates that have to be repaid in a short period of time, have come under criticism as borrowers often fail to pay the loans or tend to refinance them, increasing their debt.

Also read
Looking for a smartphone? To check mobile finder click here.

"Research has shown these loans can result in unaffordable payment and high default rates for users," David Graff, director of global product policy at Google, said on Wednesday on a Google blog. (bit.ly/1qe5nMP)

Shares in online lender Enova International fell 6.2 percent on Wednesday, while the World Acceptance Corp was down 3 percent.

"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," Kirk Chartier, Enova's chief marketing officer, said in a statement.

He added that Enova did not expect significant impact to its business from Google's decision.

The company will ban advertisements for loans where repayment is due within 60 days of the date of issue. In the United States, the company will also ban advertisements for loans with annual percentage rates (AP of 36 percent or more.

Federal policymakers and regulators have in the past discussed and rejected the idea of capping AP- or yearly interest rates on loans - at 36 percent. Some states, including New Hampshire and Montana, have done so at regional levels, however, according to the Consumer Federation of America.

"To make an advertising rule that contravenes state and federal law is not only disturbing, but it's discriminatory," Lisa McGreevy, CEO of the Online Lenders Alliance, told Reuters.

"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."

Advertisements that appear on the top and right side of a Google search results page will no longer show marketing from the payday lending industry beginning July 13.

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 12 May, 08:54 IST
NEXT ARTICLE BEGINS