Here at Quick Loans central we were highly bemused by the recent news that Short Term lenders will be banned from paid advertising on Google from July. Why are we raising our eyebrows? Well, because the move comes months after the clampdown on the short term market by the Financial Conduct Authority (FCA) in a move designed to make loans fairer for customers and the fact Facebook banned payday loan ads last year. So, can someone please tell us who is actually regulating and protecting consumers in the modern world? Will the ban make any difference to payday lenders? More importantly, will the ban make any difference to people deciding not to use a payday lender?
According to Google’s director of global product policy, David Graff, “This change is designed to protect our users from deceptive or harmful financial products.” Where was Mr Graff back in 2007/08 when high profile banks toppled the British economy, resulting in recession? Was that not a result of “deceptive” and “harmful” financial products? Can we expect further bans on other financial products in the future or to throw a curve ball, removing junk food companies from search results to stop the growing obesity problem in the UK?
The FCA has said that cost is generally not a deterrent for customers if short-term cash is needed. So, what is the deterrent to stop people taking out a payday loan? Does Google’s ban actually bring about radical change and incentivise payday lenders to cut their charges? Will other major search engines such as Yahoo and Microsoft follow Google’s lead? Is it really a fair comparison that “This ban puts payday loans in their rightful place alongside explosives and tobacco” according to Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights?”
Payday loan information will still display in Google’s organic search results, just not in ads. Surely then, is this a half-hearted moralistic attempt on Google’s part? No longer targeted by slick advertising and aggressive marketing campaigns to trap you into debt, people wanting a short term loan will still be able to make their own decisions and take out a payday loan. Rather than shaping society in areas where regulation brings little change, how convinced are you that a search engine is acting to better society? Or, the cynics amongst us may consider this simply a publicity stunt, passing judgment on a legal industry that consumers have the right to decide to use or not when it comes to their financial affairs?
What will you do now, when you need money but you can’t see an advert at the top of Google? Will you find it elsewhere and the payday loans industry simply disappear? Will traditional lenders now open up access to credit and give you a better rate, we doubt it. Or, will people simply use another search engine that “respects the integrity of consumer choice” and is “listening to consumer and industry feedback with respect to payday lending ads,” according to Microsoft. Either way, let us know here at Quick Loans central if this news makes any difference to you.