Payday lenders will no longer be able to advertise on Google after the technology giant decided to take a stand against how "unaffordable payment and high default rates" negatively impact its users.
From 13 July 2016, Google will ban ads for payday loans and some related products from its search engine.
The ban relates to ads for loans where repayment is due within 60 days of the date of issue.
In the US Google is also banning ads for loans with an APR of 36% or higher.
MoneySavingExpert.com remains a staunch opponent of unscrupulous payday loan companies and has worked on raising awareness of the subject.
Previous efforts to highlight problems with payday lenders have included a call to MPs by MSE founder Martin Lewis for payday loan ads to be banned from being shown during kids' TV programmes.
For everything you need to know about payday loans, check out our 10-point guide.
Why's Google doing this?
Google says it disabled more than 780 million ads last year alone for reasons ranging from counterfeiting to phishing (trying to take sensitive information from people by pretending to be a trustworthy source).
It also claims to be keeping a close eye on ads for financial services "given how core they are to people's livelihood and wellbeing".
In a blog posted yesterday, Google's global product policy director David Graff stated: "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 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, revolving lines of credit (eg, credit cards)."
Payday lenders in the headlines
Here at MSE, we've run a number of stories on payday loan companies in recent years:
- In November last year, the Financial Conduct Authority ruled that people taking out payday loans will never have to pay back more than double what they originally borrowed – however, MSE had called for the total cost cap to be nearer 50% to 75%, rather than 100% of the loan.
- Almost 4,000 borrowers were told last November that they were due a share of £1.7 million after CashEuroNet UK LLC, trading as QuickQuid and Pounds to Pocket, lent some customers more than they could afford to repay.
- Watchdog the Broadcast Committee of Advertising Practice launched an October 2015 consultation on a proposal championed by MSE to ban payday loan ads from being shown on kids' TV.
- Complaints about payday loans rose steeply between 1 April 2014 and 31 March 2015, according to stats from the Financial Ombudsman Service.
- The number of people struggling to cope with payday loan debts increased by more than 13,000 in the space of a year, figures produced in September 2014 showed.