Is Google Being Unfair to Payday Lenders with its new AdWords Policy?

If you are like most people, you use Google as your default search engine. This comes as no surprise, being as Google has a name that is pretty much synonymous with doing searches on the Internet. You’ve also probably seen advertisements from Google – driven by their AdWords network – to advertise products or services related to your web searches or even based on the topics of emails in your Gmail account. You can do searches for just about any topic, and you’ll usually get plenty of online ads served up to entice you to visit a businesses’ website. And it used to be that you’d find payday lending Google ads, but it looks like those days are long gone now.

Google has a long history of banning what they consider to be “bad ads.” In fact, the company went so far as to disable about 780 million Google ads last year alone. Google has a long history of providing targeted ads to their user base. The company has always seemed to hold firm to a policy that ads are good in three ways: Users get online advertisements related to their organic web searches, businesses are able to advertise to large audience affordably and Google gets to rake in tons of money by selling ads. Financial product/service ads have always been scrutinized a bit more than some other types of Internet advertisements, but it looks like payday lending companies, and other online lenders are finding that all of their Google ads have been officially classified as “bad ads.”

There has been a growing trend amongst consumer advocate groups to villainize online lenders. Other parties have jumped on board this bandwagon, including some government officials and organizations like the Consumer Financial Protection Bureau. Now, Google seems to be falling in line, as well, and has officially banned payday lending ads from their system for good. The company sums up their stance on ads for payday loans and other types of financial services by stating: “We will no longer allow ads for loans where repayment is due within 60 days of the date of issue.”

In addition to banning these types of ads, Google is putting a stop to any ads for loans that charge an annual percentage rate of 36 percent or more. The company said that they recently reviewed their policies and did research that proved that these kinds of loans can cause consumers to have payments that are too high, and have decided to make it an official policy to put a stop to these sorts of ads. Google says that the move was made to protect their users from what they call “deceptive or harmful financial products.” The official online statement Google released said that the new ban will not have any effect on Auto Loans, Credit Cards, Mortgages or Student Loans.

What Google doesn’t mention is that there have been some high profile incidents in which the CFPB penalized certain companies for acting as “middlemen” that provided leads to payday lenders. It may very well be that Google’s crack legal team realized that the CFPB could potentially paint them out as “middlemen” by way of their online ads for payday lenders and other types of online financial services. It is possible that the CFPB could have been planning on making a very big example out of Google, if the search engine giant did not comply. The CFPB has long had payday lenders in its crosshairs. No one knows for sure why Google pulled the trigger on banning ads for payday lenders, but one has to assume that the CFPB and their ongoing vendetta against alternative financial service providers likely has to figure into the equation somewhere.