From July 13, Google AdWords, the advertising arm of the search giant and its main source of revenue, will ban ads from lenders who offer loans with terms of less than 60 days. Payday lenders will be in good company on the no-go list, which currently includes sellers of weapons, drugs and counterfeit goods.
This is the first time that Google has imposed an advertising ban on financial services. “Research has shown that these loans can result in unaffordable payments and high default rates for users, so we will update our policies globally to reflect this,” wrote David Graff, Global Policy Director. products at Google, in a blog post.
“We will continue to review the effectiveness of this policy, but we hope that fewer people will be exposed to deceptive or harmful products.”
Four text ads currently appear at the top of all Google search results. A search for “quick loan” or “short loan” typically brings up ads for payday lenders in all four commercials.
Australia’s payday loan market is worth between $ 670 million and $ 908 million according to Martin North of Digital financial analysis.
The entire payday loan industry was awarded a Shonky Award by CHOICE in 2015. Payday lenders have been known to steal customers and irresponsibly offer loans to people with little ability to repay them. Hidden fees, sky-high interest rates and the willingness of lenders to offer loans to help cover the loans can be traps for low-income Australians tempted by the prospect of a small loan to get them through. the week.
Payday loans traditionally conjure up images of spacious storefronts with lighted signage and barred windows. However, more and more people are turning to short-term lenders through artfully designed websites and mobile apps, with money paid out and repayments taken directly from customers’ bank accounts.
Despite the sharper image that the new lenders are trying to promote, that hasn’t stopped some of them from taking shortcuts. In March, ASIC ordered lender Nimble to repay more than $ 1.5 million to more than 7,000 customers. The financial regulator found that Nimble did not assess the financial situation of its customers before offering the loans.
CHOICE asked Google Australia if there are any plans to remove mobile apps offering short-term loans from Google Play, but did not receive a response until the publication date.