Google announced today that it will no longer show ads for payday loans websites and lenders. Google does not want to be responsible for promoting predatory lending. Google’s product policy director, David Graff said in a blog post “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,”.
This does not come without a cost. These payday lenders pay Google big bucks to advertiser on Google’s adword program. With some keyword bringing as much as $15 per click but Google can make that up as other lenders step in to chase this high margin customer. Google will start the ban in mid June and they define a payday loan as anything under 60 days but most state laws define them as less than 30 days.
This will send some shock waves through the payday industry as thousand of website owners depending on Google Adwords to drive traffic to their websites for the easy money loans. It is sure to lead to a boom in the SEO industry as more of these lenders start to chase local natural listing in the search engines.
But with payday loans not being illegal does this mean Google is now going to start telling us what is good for us and what is not? While they ban a lot of products now most or illegal items such as explosives, illegal drugs, and other items that have a clear reason to be banned. This seems to be more like Google tells us they simply do not like the industry. This could lead to an interested path for Google and could result in a legal battle with an industry that has seen its fair share of legal troubles.
In 2014 the New York General Attorney charged Chattanooga TN business man Carey Vaughn Brown, accusing them of enabling payday loans that violates the state’s limits on interest rates in loans to New Yorkers.
“The exploitative practices — including exorbitant interest rates and automatic payments from borrowers’ bank accounts, as charged in the indictment — are sadly typical of this industry as a whole,” say Cyrus Vance Jr., the Manhattan district attorney who filed charges in the case. Brown owned MyCashNow.com and 11 other related websites. This is a fight that will be interesting to see how it plays out.