Google Bans Payday Loan Ads

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Google said Wednesday it will ban ads for payday loans to protect its customers from what it considers deceptive and harmful financial products. The ban goes into effect on July 13.

The announcement is the culmination of a lengthy collaboration between a consumer and civil rights groups that have long sought to rein in payday loans.

David Graff, Google's director of global product policy, said the company will no longer allow ads for loans with annual percentage rates of 36% or higher, or where repayment is due within 60 days of the date of issue.

"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," Graff said in a statement.

"Ads for financial services are a particular area of vigilance given how core they are to people's livelihood and well being," he stated. "When ads are good, they connect people to interesting, useful brands, businesses and products.

Unfortunately, not all ads are — some are for fake or harmful products, or seek to mislead users about the businesses they represent."

The ban will not affect companies offering mortgages, car loans, credit cards, student loans or commercial loans.

Google, of Menlo Park, Calif., has an extensive set of policies to keep bad ads out of its system. Last year it disabled more than 780 millions ads for reasons ranging from counterfeiting to phishing.

Graff said that Google hopes that "fewer people will be exposed to misleading or harmful products."

The ban comes as the Consumer Financial Protection Bureau is expected to propose new rules to restrict payday loans.

Wade Henderson, the president and CEO of the Leadership Conference on Civil and Human Rights, said Google's new policy addresses many long-standing concerns about predatory payday loans.

"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," Henderson said.

Last year Facebook banned ads for payday loans on its site. Consumers groups are urging Microsoft, Yahoo and other search engines to end payday loan ads as well.

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