In a blog post, Google's Director of Global Public Policy, David Graff, announced that the firm will be updating its advertising policies to impose tighter restrictions on ads related to financial services, particularly loans.
The restrictions will mean that certain types of loan advertisements will no longer be allowed on Google's advertising platforms, such as AdWords, from July 13, 2016, when these changes go into effect. These new restrictions will prohibit ads that meet the following criteria:
- Payday loans
- Loans where repayment is needed within 60 days of the issue date
- Loans with an APR of 36% or higher (US only)
David confirms that advertisements for mortgages, car loans, student loans, commercial loans and Revolving Lines of Credit will not be affected by these changes.
The change in policy follows research by Google, where the company found that these types of loans can "result in unaffordable payment and high default rates for users", and states that the changes are to "protect our users from deceptive or harmful financial products".
Wade Henderson, the president and CEO of The Leadership Conference on Civil and Human Rights, released a statement in support of Google's move:
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.
Policies will continue to be reviewed to ensure that fewer people will be subject to "misleading or harmful products".