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Google bans ads for predatory payday loans

By Shawn Knight
May 11, 2016
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  1. Google has revealed that it will no longer display ads for payday lenders and related products, a practice often referred to as predatory lending as it takes advantage of low-income people.

    David Graff, director of global product policy at Google, said they will no longer allow ads for loans with an APR of 36 percent or higher as well as loans where repayment is due within 60 days of the date of issue. Note that the former only applies to those in the US.

    When reviewing their policies, Graff said, research shows that such loans can result in unaffordable payments and high default rates. The change, he added, is designed to protect users from deceptive or harmful financial products and will not affect companies that offer car loans, student loans, commercial loans, revolving lines of credit (credit cards) and mortgages.

    Financial expert Dave Ramsey describes payday loans as one of the worst financial decisions you can make, putting them in the same category as title pawning and tote-the-note car lots.

    For those unfamiliar, a payday lender will let you write them a post-dated check that’s dated for the day you get paid. As an example, you can write a check for $225, hand it to the payday lender and they'll give you $200 cash on the spot. Come payday, they cash your $225 check.

    A fee of $25 may not sound like much but when you do the math, you’ll see that the interest rate is astronomical. What’s worse is that payday lenders typically take advantage of lower income people, those that can least afford to throw away money in fees and interest.

    As Ramsey correctly points out, there’s a reason you only find these types of operations at the poor end of town.

    Google’s new ad policy goes into effect July 13, 2016.

    Permalink to story.

     
  2. TheBigFatClown

    TheBigFatClown TS Guru Posts: 647   +227

    Gambling adds take advantage of poor people also and hundreds of other businesses take advantage of people in ways to make money. Cigarette sales take advantage of nicotine addicts, soda sales take advantage of sugar addicts. One of the biggest hoaxes ever perpetuated on the average joe, the 30-year mortage has people paying 3x what an actual home is worth, and Google thinks they are doing a good deed by saving a poor person $25???????

    So, doing some quick math, the PayDay loans people charge a fee of about 10%. Anything I sell on E-Bay ends up costing about that after everybodys hand goes through my pants. Ban their advertisements also.

    "will not affect companies that offer car loans, student loans, commercial loans, revolving lines of credit (credit cards) and mortgages." Yes because all these companies are not really out to make money either. They just help people for the warm fuzzy feelings they get inside for doing so. Make a credit card payment late and you get bushwhacked with a $35 late charge. 2 late payments and you're paying ridiculous interest rates. Will credit card companies be banned also?

    *face palm*

    How is a 30-year mortage,, by definition, not predatory lending?

    The irony of all this is that once you've made all your billions it's acceptable to bite the hands that feed you...so it seems.

    I don't care about PayDay loans whatsoever. I just don't see any consistency in this decision. No general logic. But I am open to other view points.
     
    Last edited: May 11, 2016
    SirChocula and alabama man like this.
  3. EClyde

    EClyde TS Guru Posts: 706   +181




    How is a college loan not predatory lending as well
     
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  4. TheBigFatClown

    TheBigFatClown TS Guru Posts: 647   +227

    It might as well be. I just find the whole thing odd still. The cutoff they have chosen is 36% so I guess that implies that charging 35% on a home loan or any other loan is okay? LoL.

    They should get George Herbert Walker to do a promo for this decision. "Loans at 35% Good! Loans at 36% or more. Bad! Not Good!"
     
    SirChocula and alabama man like this.
  5. Duckeenie

    Duckeenie TS Booster Posts: 80   +61

    I probably depends on the legislation in your country, in the UK however it not unusual for the APR to be in the 1000s on Payday loans.
     
  6. dms96960

    dms96960 TS Addict Posts: 258   +28

    "So, doing some quick math, the PayDay loans people charge a fee of about 10%."

    I do not believe that is correct. If next "payday" was in one year, the $25 interest on the $200 is 12.5%. However, these payday loans are usually for a bi-weekly pay period (26 pay periods per year) so I think that works out to something like 325% interest. That seems to astronomical to be accurate so I must have screwed something up here.
     
  7. hahahanoobs

    hahahanoobs TS Evangelist Posts: 1,631   +432

    Baby steps...
     
  8. Uncle Al

    Uncle Al TS Evangelist Posts: 1,663   +774

    Well done! That's one big plus for Google .... now if they would just go after those "for profit" colleges that are also rapeing people, that would be another good one!
     
  9. Shawn Knight

    Shawn Knight TechSpot Staff Topic Starter Posts: 8,078   +96

    I 100% agree with everything you said, especially the 30-year mortgage! Debt of any kind destroys your ability to build wealth but it's become so common in today's culture that people just accept it as a way of life. People no longer ask how much something costs, they just want to know if they can make the monthly payment which is really unfortunate.
     
  10. Raoul Duke

    Raoul Duke TS Guru Posts: 930   +354

    It may not be consistent, but I'm glad they do it. I've seen people with low, low, income and once they do this the first time, they have to pay back the big chunk (say the articles $225.00). This leaves them short for the month, so they have to do it again, and again, and again.
    I agree though that the financial industry really needs to be cut down to size, when they are the biggest items in the economy, I'm no economist, but that seems pretty troubling since they don't actually produce anything except profit for shareholders, debt and rising prices for everyone else since the money is worth less and less. When they crash they get bailed out with public money which is never reimbursed all the while paying their CEO's 7 digit salaries. I'm tired of reading about banks and financial institutions racking up another record quarter while it seems the rest of the economy is in a recession and the interest on savings can't even keep up with inflation. Quite worried as well that they will trigger another big crash which will screw us all (again)
     

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