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Google kneecaps payday loan ads

Leave the AdWords. Take the cannoli.

By Shaun Nichols, 11 May 2016

Google says it will no longer serve ads for short-term loan services it considers to be predatory lenders.

The Chocolate Factory says that as of July 13, it will no longer be taking ads from loan services that seek repayment within 60 days or carry an annual percentage rate (APR) of 36 per cent interest or higher.

The aim, says Google, is to distance itself from "payday loan" providers that it believes prey on the poor and those hard-up by giving short-term loans carrying extremely high interest rates.

"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," wrote Google product policy director David Graff.

"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 says that the decision to axe payday loan ads is an extension on its existing policy against harmful or misleading ads, such as those advertising counterfeit merchandise or linking to phishing sites.

Payday loan services have been criticized for using misleading or predatory ads, promising fast cash payments without mentioning the high interest rates that customers are charged. According to the Consumer Federation of America, more than a dozen US states have clamped down on payday loan services by placing caps on short term interest rates or loans based on a held check.

In announcing the new rules, Google also enlisted the help of consumer advocacy groups who suggest that search engines can also play a valuable part it clamping down on the predatory lenders.

"The internet should not be a place that profits from your weaknesses," said Alvaro Bedoya, executive director of the Center for Privacy and Technology at Georgetown Law school.

"If you’re broke and search the internet for help, you should not be hit with ads for payday lenders charging 1,000 percent interest." ®

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