16th May 2016
Google announced last week that as of July 13, the search engine would stop allowing ads for loans due within 60 days or with an interest rate of 36% or higher. Google’s director of product policy, David Graff stated, “This change is designed to protect our users from deceptive or harmful financial products and will not affect companies offering loans such as mortgages, car loans, student loans, commercial loans, or revolving lines of credit.” Borrowers will still be able to search for potential lenders using a standard Google search. The lenders that fall into Google’s short-term, high-interest category will simply not be able to purchase advertising.
Lisa McGreevy, president of The Online Lenders Association, and Russell Hamblin-Boone, chief executive of The Consumer Finance Association, both agreed that the move was ‘disappointing.’ “Short term loans are a legal source of credit used by millions of people across the UK, and the industry is highly regulated, with a cap on the total cost of credit,” said Russell Hamblin-Boone. Mr Hamblin-Boone went on to argue that government regulations have already removed the rogue lenders from the market. A recent report published by the Archbishop of Canterbury concluded that payday lending has fallen 68% since 2013.
As a private corporation, Google has every right to accept business from whomever they choose. Refusing to display advertising from certain lenders would be no different than Sainsbury’s suddenly stopping the sale cigarettes. Each has the right to do so legally. However, Google is exponentially more powerful than a national grocery chain. Google has 90% of the market share of online search engines. The company has the ability to direct people where or where not to go for commerce. Many agree that Google’s new policy is far more influential than any government regulation.
Whether you agree with payday lenders or not, Google’s ability to censor businesses is intimidating. Many think that Google is acting as a nanny rather than a free market enterprise. Ultimately, responsible borrowing is down to the borrower himself. Google has in fact refused advertising service to other industries, which include counterfeit goods, weight loss scams, and illegal goods like guns and drugs. The online search giant deactivated over 780 million ads just last year alone. However, this situation is different as payday lenders are completely legal.
TheLendersList.co.uk advocates for responsible lending. Borrowers should weigh their options carefully when deciding to take out a loan. If you have no intention of paying back a loan or cannot afford to, do not borrow. Borrowers are encouraged to shop around for the best rates for a loan and such loans should be used for genuine emergency situations. We encourage customers to only borrow the amount needed and read through terms and conditions thoroughly so you are aware of all charges, fees, and the implications of missed payments.