Google Banning Payday Loan Ads In Search Results

Discussion in 'HardForum Tech News' started by HardOCP News, May 11, 2016.

  1. HardOCP News

    HardOCP News [H] News

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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.
     
  2. Draax

    Draax [H]ardness Supreme

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    At what rate does a loan become usury?
     
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  3. Vaulter98c

    Vaulter98c [H]ard|DCer of the Month - October 2009

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    So a 35% loan is OK? I thought 8% was high, shit
     
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  4. cyclone3d

    cyclone3d [H]ardForum Junkie

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    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".
     
  5. NeoNemesis

    NeoNemesis 2[H]4U

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    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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  6. Teenyman45

    Teenyman45 2[H]4U

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    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.
     
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  7. athenian200

    athenian200 Gawd

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    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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  8. Teenyman45

    Teenyman45 2[H]4U

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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.
     
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  9. Quix

    Quix 2[H]4U

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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.
     
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  10. athenian200

    athenian200 Gawd

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    Ah, I didn't know about that. Certainly makes sense to comply now rather than later.
    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.
     
  11. pothb

    pothb [H]ardness Supreme

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    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.
     
  12. Retronym

    Retronym Something big is coming.

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    mommy and daddy google
     
  13. Retronym

    Retronym Something big is coming.

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    At whatever arbitrary point the guys with guns feel supersedes the right of the market participant from entering into a voluntary contract.
     
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  14. raz-0

    raz-0 [H]ardness Supreme

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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.
     
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  15. ccmfreak2

    ccmfreak2 Limp Gawd

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    These companies have already been outlawed in some States. Glad to see Google and others taking a Consumer Advocacy stand against them.
     
  16. Twisted Kidney

    Twisted Kidney 2[H]4U

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    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.
     
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  17. VIC-20

    VIC-20 Gawd

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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
     
  18. Lith1um

    Lith1um 2[H]4U

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  19. Spidey329

    Spidey329 [H]ardForum Junkie

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    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.
     
  20. Tweak42

    Tweak42 Gawd

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    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.
     
  21. pothb

    pothb [H]ardness Supreme

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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.
     
  22. nysmo

    nysmo Gawd

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    How is a 35% loan for someone desperate enough to take it even payable? Wouldnt most of these just end in default?
     
  23. lostinseganet

    lostinseganet [H]ard|Gawd

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    Some of these loans can reach up to 600% they are insane, but they give you like 8 years to pay it off >_>
     
  24. dvsman

    dvsman 2[H]4U

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    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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  25. lostinseganet

    lostinseganet [H]ard|Gawd

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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...
     
  26. Todd Walter

    Todd Walter Gawd

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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!
     
  27. Epic|

    Epic| Limp Gawd

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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.
     
  28. DocSavage

    DocSavage 2[H]4U

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    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.
     
  29. dvsman

    dvsman 2[H]4U

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    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.
     
  30. Teenyman45

    Teenyman45 2[H]4U

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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.

    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.
     
  31. Ryokurin

    Ryokurin [H]ardForum Junkie

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    Private company. They don't have to accept everyone's business.

    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.
     
  32. Lith1um

    Lith1um 2[H]4U

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    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.
     
  33. Teenyman45

    Teenyman45 2[H]4U

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    And that's why I typed leadership in both parties.
     
  34. pothb

    pothb [H]ardness Supreme

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    That's a typo. It should've been Consumer Protect is a choice act.
     
  35. MongGrel

    MongGrel [H]ard|Gawd

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    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.
     
    Last edited: May 13, 2016
  36. /dev/null

    /dev/null [H]ardForum Junkie

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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?