Google announced last week that it would soon ban ads for payday loans and related products. The company said effective July 13, Google will not display ads for loans that require payment within 60 days of the date of issue. In the U.S., ads for loans with an APR of 36% or higher will also not be shown.
The company said the move is “designed to protect our users from deceptive or harmful products.”
Google bans payday loans while investing in them?
Meanwhile, according to a report by the Wall Street Journal, Google’s parent company, Alphabet Inc., has been investing in the online lender LendUp since it launched in 2012. LendUp says it is an ‘alternative’ to payday loans, since it doesn’t charge early payment penalties or roll over loans when borrowers can’t pay the loan back — which are common practices used in the payday loan industry to get more money from borrowers.
But as the Wall Street Journal points out, just like traditional payday lenders, LendUp ‘specializes in short-term, small-dollar loans’ with annual percentage rates that are in line with traditional payday lenders.
Just how ‘in line’ are they? LendUp offers loans with terms as short as seven days and APRs that can run higher than 600%, according to the WSJ.
So according to Google’s new rules, paid ads for LendUp products should be removed from Google search results beginning July 13. LendUp and Google’s parent company were reportedly not involved in the decision to ban payday loan ads.
And here’s what LendUp’s CEO said about the situation:
“We do worry about how this will play out and think it paints with too broad a brush.’
The ban will only affect paid ads, not Google’s actual search results.
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