Due to concerns that people are being left in financial difficulty as a result of taking out payday loans, Google is banning lenders’ adverts from its service.
From 13 July, Google will be banning payday loan adverts that are making people pay a 36 per cent or higher annual interest rate, or have short repayment dates. Google says doing this will help improve the safety and protection of its users from deceptive or harmful financial products.
“Research has shown that these loans can result in unaffordable payment and high default rates for users,” said Google’s director of public policy, David Graff. He also adds that this ban will not cover car loans, credit cards, commercial loans, student loans or mortgages.
After the global financial crisis in 2008 ended, there was an increased amount of people lending money for a short-term solution. This then made people find themselves in financial difficulty. Currently, payday loans are heavily scrutinised, with new laws and price caps introduced in the last year or so.
However, the move has been met with criticism from some. Chief executive of Consumer Finance Association, Russell Hamblin-Boone, said: “The move by Google would affect the freedom of people’s choice, UK consumers enjoy a vibrant, highly competitive credit market and we will be interested to read the evidence that Google uses.”