Google Banning Payday Loan Ads In Search Results

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Google announced today that, as of July 13th, the search giant is banning ads for payday loans, loans where repayment is due within 60 days of the date of issue and loans with an APR of 36%.

In that vein, today we’re sharing an update that will go into effect on July 13, 2016: we’re banning ads for payday loans and some related products from our ads systems. We will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the U.S., we are also banning ads for loans with an APR of 36% or higher. 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.
 
The so called "payday" and "title" loans are a complete scam and the only reason I can see them still being legal is there must be some hardcore lobbying (bribing) being done to keep them legal.

They are basically legalized loan shark companies.

And there are still people stupid enough to get these types of "loans".
 
The max interest rate in Canada is 60% per annum. Some of the payday loan places get pretty close to that.

As far as I'm concerned, those places shouldn't even be allowed to exist.
 
The biggest issue with payday loans isn't just the basic, and often usurious, interest rate, the more important money maker are the high fees (as a percentage of the loan) that are baked into taking out the loan and then high roll-over, or re-issuance, or extension fees. These loans can go into several hundred percent or in some cases spike to over 1,000% rate.

U.S. political leadership in both major parties are, of course, pro-payday loans.
 
How exactly is this a good business decision on Google's part? It sounds like they're basically rejecting money from advertisers hoping that it will be such a good PR move that it will make up for lost revenues. But I'm pretty sure that people who aren't using Google by now aren't going to start because they heard this story.

I can't see the strategy here.
 
athenian200 said:
How exactly is this a good business decision on Google's part? It sounds like they're basically rejecting money from advertisers hoping that it will be such a good PR move that it will make up for lost revenues. But I'm pretty sure that people who aren't using Google by now aren't going to start because they heard this story.

I can't see the strategy here.
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One, the CFPB is finally starting to move a bit on payday loans so there might be a move to get in front of the regulatory arm rather than have a surprise loss in revenue later. Two, I think it is very much a PR move that is almost certainly more than worth the minor loss in ad revenue that can almost certainly be replaced with other promoted ads.
 
NeoNemesis said:
The max interest rate in Canada is 60% per annum. Some of the payday loan places get pretty close to that.

As far as I'm concerned, those places shouldn't even be allowed to exist.
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Actually, pretty much all of them charge significantly more than that. They claim that the majority of the charge is a "service fee" to avoid the law. It's a criminal enterprise, and they need to crack down on it.
 
Teenyman45 said:
One, the CFPB is finally starting to move a bit on payday loans so there might be a move to get in front of the regulatory arm rather than have a surprise loss in revenue later.
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Ah, I didn't know about that. Certainly makes sense to comply now rather than later.
Two, I think it is very much a PR move that is almost certainly more than worth the minor loss in ad revenue that can almost certainly be replaced with other promoted ads.
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If it gets enough press, it might very well make them look good enough to offset the loss. But they'll definitely need media outlets to talk about it.
 
Payday loans really are legalied loansharks... It's prett clear that they also basically just prey on people in need. That said, there are clearly other idiots who use it for stupid shit.
 
athenian200 said:
How exactly is this a good business decision on Google's part? It sounds like they're basically rejecting money from advertisers hoping that it will be such a good PR move that it will make up for lost revenues. But I'm pretty sure that people who aren't using Google by now aren't going to start because they heard this story.

I can't see the strategy here.
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Well if you are to believe their reasoning for banning the advertising of licensed firearms retailers, it's to avoid liability. We COULD be sued over X, because you can be sued over anything, and we run ads for it, so get rid of X.

Mostly, it's just the politics of those running Google.

However, in this case, they may have something as they DO determine what ads anyone sees, and there have been multiple studies indicating that various demographics gets you hit with differing ads, Payday loans being one of them.
 
These companies have already been outlawed in some States. Glad to see Google and others taking a Consumer Advocacy stand against them.
 
It really is a disgusting industry. I have a lot of patience for free enterprise and its ability to sort so many problems, but these animals all seem to miraculously charge the legal maximum with no hint of real competition. They just run a sleazy little shell game to hide the real fees they charge.
 
NeoNemesis said:
The max interest rate in Canada is 60% per annum. Some of the payday loan places get pretty close to that.

As far as I'm concerned, those places shouldn't even be allowed to exist.
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Its actually pretty confusing in Canada. Provinces have different laws for payday loans vs typical loans, but the end result often a vicious cycle of borrowing and I agree that they should not exist. In Ontario, for example, it may be $21 interest on every $100 for 2 weeks. Effective annual rate is 14,299% . Simple interest equivalent annual is 548%.

Source: Payday loans in Canada - Wikipedia, the free encyclopedia
 
There's a great documentary on these types of loans. Here: It's Time For Change

Worth the watch. I'm glad Google is doing this, these places are shady and pray upon the desperate. They force people into a situation that becomes harder and harder to pull out of.

It even discusses the f-ed up practice of banks to queue debits at night, then put them through in highest to lowest fashion so they can triple fee you. IE: say you have $25 in your account, you have debits occurring that get queued as $5, $15, and $50. If they're put in that order, you'd cover the first two and overdraft on the third, resulting in one $35 OD fee. But what the bank will do is process the $50 first, putting the account in OD status and then process the remaining two for 3x $35 ($105). That slight tweak in how the transactions are processed can bring in a huge source of revenue at the expense of the customer.
 
Wish they lowered the boom even further, but still good for Google.
You can always judge the downscale of a neighborhood or city when you see these payday/title loan places in corner strip malls. Right down there with those shady rent-to-own businesses.
 
Lith1um said:
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Man... you know when there has just been too much feminist around that you get annoyed when it's mentioned in a completely unrelated video.

I'm not surprised by the info in it though.... I never thought it was as big as it is, but not at all surprising.
 
How is a 35% loan for someone desperate enough to take it even payable? Wouldnt most of these just end in default?
 
Part of the problem is that most people just don't understand how credit / financing works. Either their parents didn't explain it or they developed bad habits from their youth. I know when I got my first credit card in college (I'm 45 now), I did some stupid things that I later regretted. It took sitting down with a calculator and realizing how much was going out was just interest and not going to principal that finally woke me up. Back in the day they had the "minimum payment" per month with no other explanation - which by law they now have to include.

Plus, these places also tend to hook people with poor credit, so it becomes a never ending cycle for them. Don't pay, credit gets wrecked, which means even less chance at traditional / "normal" financing.
 
nysmo said:
How is a 35% loan for someone desperate enough to take it even payable? Wouldnt most of these just end in default?
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That is what the car shark loaners are hopping for. They want to take you for all you got then repo your car and so the same to someone else with the repoed car...
 
NeoNemesis said:
The max interest rate in Canada is 60% per annum. Some of the payday loan places get pretty close to that.

As far as I'm concerned, those places shouldn't even be allowed to exist.
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That's the national rate for determining criminality. Most provinces went lower, thankfully, or credit cards would be much more brutal!
 
dvsman said:
Part of the problem is that most people just don't understand how credit / financing works. Either their parents didn't explain it or they developed bad habits from their youth. I know when I got my first credit card in college (I'm 45 now), I did some stupid things that I later regretted. It took sitting down with a calculator and realizing how much was going out was just interest and not going to principal that finally woke me up. Back in the day they had the "minimum payment" per month with no other explanation - which by law they now have to include.

Plus, these places also tend to hook people with poor credit, so it becomes a never ending cycle for them. Don't pay, credit gets wrecked, which means even less chance at traditional / "normal" financing.
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Ding ding ding... Little or nothing taught in schools... clueless parents setting the example of overwork, underpay, overspending and living on the edge... it's no wonder most have only the faintest grasp on their finances.
 
A side story - my cousin used to own a garage. One of his big customers was a guy selling used cars at one of those dealers on the side of the road that you always pass but never pay attention to. The guy would bring in cars for my cousin to fix all the time and I got to know him pretty well. One day he told me that he never made any money on the "selling" of the cars (most were crap boxes that cost a few grand tops), but most of his customers had hella bad credit so they would 1) get crazy interest rates (which some of the more reliable / innocent people would actually pay) OR 2) they would get behind payments and the car would get repoed and brought back and resold all over again.

I swear I saw the same cars coming and going month after month. He also had some lo-jack knock off system in the cars so he always knew where they were and could snatch them back.
 
dvsman said:
A side story - my cousin used to own a garage. One of his big customers was a guy selling used cars at one of those dealers on the side of the road that you always pass but never pay attention to. The guy would bring in cars for my cousin to fix all the time and I got to know him pretty well. One day he told me that he never made any money on the "selling" of the cars (most were crap boxes that cost a few grand tops), but most of his customers had hella bad credit so they would 1) get crazy interest rates (which some of the more reliable / innocent people would actually pay) OR 2) they would get behind payments and the car would get repoed and brought back and resold all over again.

I swear I saw the same cars coming and going month after month. He also had some lo-jack knock off system in the cars so he always knew where they were and could snatch them back.
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That would be a "buy here - pay here" used dealership for people with no or bad credit and almost no cash. Rent to own furniture and electronics places are pretty much the same thing.

DocSavage said:
An interesting article: Payday lenders find ways around efforts to limit interest rates

Payday loan companies were almost banned in Missouri a few years back, but they somehow lobbied and convinced people that they provide a needed service for the poor. Sorry, but the poor are better off defaulting on other bills than getting mixed up with these guys.
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One proposed fix would be U.S. Post Office banking and check cashing. This would help stabilize USPS finances, cut down many of the outrageous fees charged by payday lenders, check cashing stores, and large bank "service" fees levied on the poor. Most (all?) congressional Republicans and some Democrats are, of course, opposed to this solution.
 
Retronym said:
mommy and daddy google
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Private company. They don't have to accept everyone's business.

nysmo said:
How is a 35% loan for someone desperate enough to take it even payable? Wouldnt most of these just end in default?
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Not everyone realizes what that rate means. Look at all of the Buy Here, Pay Here places that get away with 20 and 25% car loans. Even the places that don't charge that high usually inflate the price of the car to make off that way. It's another one of those "it's expensive to be poor" issues.
 
DNC chair Debbie Wasserman Schultz is co-sponsoring a bill which would delay upcoming payday lending regulations from the Consumer Financial Protection Bureau by two years, and nullify the provisions in states which adopt their own payday lending laws. Her bill is called the, "Consumer Protection and Choice Act". The average annual interest rate for payday lenders in her home state of Florida is over 300%.

"Consumer protection".....my ass.

/I've been sending a few bucks here and there to her opponent Tim Canova, hopefully he will shit can DWS.
 
Lith1um said:
DNC chair Debbie Wasserman Schultz is co-sponsoring a bill which would delay upcoming payday lending regulations from the Consumer Financial Protection Bureau by two years, and nullify the provisions in states which adopt their own payday lending laws. Her bill is called the, "Consumer Protection and Choice Act". The average annual interest rate for payday lenders in her home state of Florida is over 300%.

"Consumer protection".....my ass.

/I've been sending a few bucks here and there to her opponent Tim Canova, hopefully he will shit can DWS.
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And that's why I typed leadership in both parties.
 
Lith1um said:
DNC chair Debbie Wasserman Schultz is co-sponsoring a bill which would delay upcoming payday lending regulations from the Consumer Financial Protection Bureau by two years, and nullify the provisions in states which adopt their own payday lending laws. Her bill is called the, "Consumer Protection and Choice Act". The average annual interest rate for payday lenders in her home state of Florida is over 300%.

"Consumer protection".....my ass.

/I've been sending a few bucks here and there to her opponent Tim Canova, hopefully he will shit can DWS.
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That's a typo. It should've been Consumer Protect is a choice act.
 
I'm all for it, looks like Bing is following along a bit in a different area.

Bing bans tech support ads—because they’re mostly scams

I remember around 1982 or so there was a place just outside of base offered car stereos, various things on a get it now, charge high interest basis with some decent prices.

I saved up the money to buy a system outright with cash and went in to buy one, had to argue with the guy to get him to sell it to me for cash outright at the time.

Was kind of interesting, he had to sell it, but didn't want to without a contract involved.
 
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I wonder if this is a rule just for the US/American version of google?

I think in Brazil the equivalent of the FED is 14-15%. Normal loans for cars & motorcycles are 3-5% PER MONTH, not including any fees. That is normal and a "decent" interest rate. They have no credit agencies, AFAIK, so....

If you are bank/cc company in Brazil & borrowing at 14-15% and you want to make 20% then you need to charge 34-35%, no?
 
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