While some might argue that payday loans are a necessary evil and if not for them some would go hungry or even lose their homes, the fact is they are often predatory and there is enough fine print that goes unread that often a small loan is paid back and as much as ten times the terms.
Google’s announcement on banning payday loans
While Google has in the past banned ads for gun sales, explosives and overly explicit (borderline) pornography, the search engine giant has largely allowed anything that is not illegal to buy advertising on its site. Today, the company for the first time, put a ban on a rather broad financial product. While Google does believe, with good reason, that it’s search engine delivers a service; the company is no longer interested in allowing its customers to search for potential financial predators.
While searchers will still get results for payday lenders, Google simply won’t be accepting money from them anymore. Those offering loans will be subject to the algorithms Google employs to determine search results.
“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,” Google global product policy director David Graff wrote in an early morning blog post.
Google now joins Facebook in not accepting money from these companies that can often charge triple digit annual interest fees.
While buyer beware comes to mind for many, if your child needs formula and you don’t feel you have another option. Well, there are a lot of payday load providers for a reason.
Let’s face it, some will also use the loan to buy drugs, cigarettes and alcohol but that’s hardly the point.
Not surprisingly, groups paid by providers of these loans to block local, state and federal laws regarding their lending practices were up in arms and calling foul.
“Facebook and others are making a blanket assessment about the payday lending industry rather than discerning the good actors from the bad actors,” the Community Financial Services Association of America, a payday lending trade group, said in a statement. “This is unfair towards those that are legal, licensed lenders.”
While true that most that use payday loan seekers don’t have access to a traditional bank, many don’t have the education or the intelligence to see the long-term potential problems if they don’t pay it back immediately.
“This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending,” Wade Henderson, the president and chief executive Leadership Conference on Civil and Human Rights, said in a statement. “Low-income people and people of color have long been targeted by slick advertising and aggressive marketing campaigns to trap consumers into outrageously high interest loans.”