Internet giant Google has decided not to show sponsored ads for short-term loans anymore because they can pour people into poverty.
Specifically, ads for the payday loans, where repayment is due within 60 days of the date of issue and some related products will be banned by the company. Many Americans, often vulnerable anyway, close the loan down to bridge the period until their next pay deposit but get into trouble by the towering interest associated with the loans. Those who pay late are often obliged to take out a new loan to pay for the last and are ultimately trapped in a vicious circle of ever higher payments.
The action will start on 13 July. In the US, all loans with an annual percentage rate of more than 36 percent will also be banished from the advertisements.
“This change is designed to protect our users from deceptive or harmful financial products and will not affect companies offering loans such as Mortgages, Car Loans, Student Loans, Commercial loans, Revolving Lines of Credit (e.g. Credit Cards)”.
Google wrote in a blog post.
“We’ll continue to review the effectiveness of this policy, but our hope is that fewer people will be exposed to misleading or harmful products.”
The measure does not mean that users will not get results for short-term loans on Google anymore. It comes only to advertising. It is also not the first time that products are banned from the ads, but it went mostly so far for “logical” issues, such as illegal drugs, weapons, or explosives. Last year, 780 million ads were turned off. However, Facebook is also not showing ads for short term loans for some time.