Payday loan products are still advertised in Google search results, five months after the technology company excited consumer groups by pledging to ban payday lenders from its ad system.
Although ads from payday lenders do not appear to be populating Google search results, ads from lead-generation companies that route potential borrowers to lenders are, a review of results indicates.
Sites such as CashNetUSA and GoInstallmentLoans advertise short-term, small-dollar loans that in some cases fall outside of the parameters Google said it would impose to block payday loans. People who search for terms like “payday loans” or “need cash fast” would see their ads in search results.
The sites do not offer loans. Instead, through a complicated bidding process, they connect borrowers to lenders. Yet they could funnel people in urgent need of cash to the kinds of services that Google banned as harmful.
Some of the sites steer people toward loans that clearly run afoul of Google’s restrictions. For example, Google banned short-term loans with annual percentage rates over 36 percent, but some sites advertise loans with APRs of 299 percent.
Others flaunt the rules in more subtle ways. For instance, while they might tout loans that fall within Google’s guidelines for borrowers with good credit, they also offer “alternative loan solutions” to people with poor credit. High-cost payday loans are typically used by people with poor credit and few alternatives.
A Google representative said “we continue to implement our policy and will take action on ads and advertisers that are not in compliance. These actions include removing ads and permanently banning advertisers from using AdWords.”
Google said that, since making the change, it has disapproved 3 million ads before they showed up on the site because they would have violated the new policies. It also said it took action on thousands of advertisers’ accounts that violated the policy.
Some of the consumer and civil rights groups that initially backed and praised Google’s move in May expressed continuing patience and gratitude with the company.
“We expected that there would be some folks in this industry who do not want to play by the rules,” said Scott Simpson, a representative for the Leadership Conference on Civil and Human Rights, a coalition of civil rights groups that had coordinated with Google on the ban.
Simpson noted that online lenders were sophisticated, and he said his group thought Google was acting in good faith. “Google showed some real leadership on this,” he said.
Gynnie Robnett, the payday campaign director for Americans for Financial Reform, said her organization is pleased with Google, but added that it is “maybe no surprise that some in this industry don’t want to play by the rules.”
“Any ads that funnel Google customers toward high interest rate loans are in violation of Google’s new policy and should be reported through the proper channels,” Robnett told the Examiner.
Google’s ban on payday ads was announced as the Consumer Financial Protection Bureau prepared to propose new regulations on the payday loan industry. The rules were meant to prevent borrowers from falling into debt “traps” in which they rely on a string of high-cost loans to pay off earlier loans.
The public comment period on the bureau’s rule is set to end Friday. Both the industry and its critics have mobilized to sway the agency, with critics demanding tighter rules and lenders warning that their industry is at risk of being wiped out.
An industry group, the Community Financial Services Association of America, estimated Wednesday that more than 1 million comments would be submitted before the deadline, easily a record for the 6-year-old bureau.
