Google Bans Ads For Payday Loans (theverge.com)

An anonymous reader writes: Google has decided it doesn't want to promote predatory lending practices that are harmful to consumers, so the company has decided to ban ads for payday loans and some related products from their ads systems. "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," Google's product policy director, David Graff, writes in a blog post. Payday loans often come with extremely high interest rates if they aren't paid back immediately, which can push people further in debt. Georgetown's Center on Privacy and Technology notes in a statement, "Payday lenders profit from people's weaknesses -- particularly poor people and people of color. Every time someone clicks on those ads, search engines profit, too." While Google may lose some revenue in the short-run by removing these ads, the move will likely benefit the company in the long-run (positive PR doesn't hurt) as Google users should have more trust in the ads they come across. Payday loans will be banned from Google globally starting June 13th.

Comments

Excellent

[Nethemas the Great]

Now when are they going to ban this one weird trick that almost broke the Internet among all the other forms of idiot bait.

Trust

[nmb3000]

users should have more trust in the ads they come across

Hahahahaha, no. That ship sailed a long time ago.

Why...

[Eyezen]

Do we have to bring race into everything. Payday loans prey on poor people, period end of story. People of both color and means dont fall prey to payday loans schemes, in fact i'd say its racist to suggest they do.

If you're an employer, you can help

[Solandri]

These things are poison. Thinking of them in terms of interest rates just confuses the matter. Once someone living paycheck-to-paycheck uses a payday loan whose fees + interest works out to (say) 15% of their paycheck they basically have to live the next two weeks on just 85% of what they usually live off of. Thus guaranteeing they'll be short again next paycheck, forcing them to take another payday loan, and driving them further underwater.

When I learned that a not-insignificant number of our employees were using these, I got the board to approve no-fee advances on your paycheck for emergencies (i.e. on request once a month, after manager approval if you needed it more often - to prevent someone from abusing this to go from living paycheck-to-paycheck, to living half-paycheck-to-half-paycheck). If you're one week into the 2-week pay period, you've already earned your pay for that first week. The company is just holding onto your money to simplify the bookkeeping. If you have an emergency and need to tap that paycheck early, there's really no reason for the company to refuse (unless they're also surviving payroll to payroll).

The long-term solution is to build up enough savings so you aren't living paycheck-to-paycheck. But employer-approved pay advances can help stop someone from slipping into the negative due to a one-time unexpected expense, at which point these loan sharks will make sure they stay underwater.

And contrary to what someone else commented, these loans do not prey on poor people. This isn't an income problem, it's a cashflow problem. You can be poor (low income) and never need a payday loan (income > expenses, and have sufficient savings to tide you over to next paycheck in the event of an emergency). These loans prey on people living paycheck-to-paycheck. You can be rich and run into the exact same problem if your expenses exceed your income and you don't have a savings buffer. That's how professional athletes and celebrities wind up going bankrupt.

Re:Google harms the most vulnerable

[LWATCDR]

If Bruce Springsteen and Michael Moore can refuse to do business in North Carolina then why should a bakery have to do business with someone they disagree with?