Google already bans advertisements for products it deems dangerous, like weapons, drugs and tobacco. Now, the company says it wants to protect consumers from services that are financially dangerous.
Beginning July 13, Google will stop showing ads for payday lenders with annual interest rates over 36 percent, or lenders that give borrowers less than two months to repay their debts.
Advocacy groups praised Google’s move, saying lenders that charge exorbitantly high rates prey on vulnerable, low-income people.
The Consumer Financial Protection Bureau said half of online payday loan accounts incur at least one overdraft or payment failure charge, costing consumers an average fee of $185.
Google isn’t alone in going after payday lenders. Facebook, the second-largest online company in terms of ad revenue, also refuses to host ads from payday lenders.
And that could seriously hamper these lenders’ ability to operate. The Washington Post wrote: "Washington regulators, as well as a handful of states, have been trying to limit the activities of payday lenders. … 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."
Google said the policy change won’t affect other companies that offer loans on products like mortgages, cars, student loans or credit cards.
This video includes a clip from Google and images from Getty Images.