Google Takes A Stand Against Payday Lenders

2016-05-19

​ Top search engine Google, has just taken a landmark stance against payday loans lenders, who offer short term loans at extremely high interest rates – often putting consumers at great risk for unmanageable debt as they struggle to pay off loans and interest, only to have to borrow again after having to account for the significant financial hit. All too often, those in the greatest need of debt solutions and financial advice, are those who fall victim to what initially appears to be a viable short-term solution to a financial pinch. Many councillors, community activists and Anti-poverty groups like ACORN, are pushing to have legislation introduced which cracks down on companies who use predatory marketing techniques to attract borrowers who are already struggling financially. Hopefully, Google is the first in a long line of corporations that turn away from the business of payday lending, making it more difficult to cash in on the financial distress of thousands. Google’s official statement and policy can be found below. Google Takes a Stand Against Payday Lenders As of July 13, 2016, web browsers will no longer see ads for loans that require repayment within 60 days. In the US this extends to loans with APR of 36% or higher. Often times, a person attending our office is in a state of stress and agitation as a result of these payday loans. These loans are often taken out during periods of great distress and in most cases, the borrower is in no state of mind to consider the financial costs of these payday loans and the longer term consequences of their actions. What follows is typical of most payday loan borrowers. They struggle to service their one loan, often paying fees and interests of 20% every two weeks (which works out to an astronomical annual rate of 546 percent!). They are able to do this until the next unexpected expense, which leads them to take out another payday loan. Their financial situation quickly deteriorates thereafter as the costs of payments to the payday lenders soon consume a large portion of the household budget to the point where other debts cannot be paid or regular household expenses are not being met. “According to Wade Henderson, president and CEO of the Leadership Conference on Civil and Human Rights, ‘This new policy addresses many of the longstanding concerns shared by the entire civil rights community about predatory payday lending. These companies have long used slick advertising and aggressive marketing to trap consumers into outrageously high interest loans – often those least able to afford it.” We applaud Google’s new policy of banning ads from payday lenders as it will make it more difficult for these lenders to take advantage of individuals at a moment where they are weak and vulnerable. Full policy releasehere. ​ ​​​