AdWords Advertising Policies for Payday Loans

Aug. 21 2019

In July 2016, Google ads for payday loans fell under a new AdWords advertising policy. “We will no longer allow ads for loans where repayment is due within 60 days of the date of issue. In the U.S., we are also banning ads for loans with an APR of 36% or higher,” Google announced. The company said this policy was in line with its philosophy of not advertising products and services that could mislead, harm, or deceive consumers.

Payday Loans AdWords Advertising Policies

Google AdWords Requirements for Payday Loan Ads

Google’s current advertising policies for financial products and services do not explicitly say anything about banning payday loans. The only place the term “payday loan” appears is as an example of a personal loan. 

Google AdWords policy also places title loans and pawn shops in this advertising category, but not mortgages, student loans, car loans, credit cards, or personal lines of credit. 

If a company wants to advertise a payday loan through AdWords, the ad’s landing page must disclose certain loan details:

  • Minimum and maximum loan repayment periods (e.g., 61 days to 365 days)
  • Maximum annual percentage rate (e.g., 35.99 percent APR)
  • Total loan cost, including all fees

Does AdWords Ban Payday Loan Ads?

AdWords policy does implicitly ban payday loan advertising under two more requirements that apply whether a company is advertising as a lender, a lead generator, or an affiliate marketer:

  1. Google does not allow the promotion of short-term personal loans that must be fully repaid in 60 days or less.
  2. Google does not allow ads targeting U.S. customers for high APR personal loans. For AdWords purposes, a high APR is 36 percent or higher.

Further, Google requires its advertisers to comply with the Truth in Lending Act and display the maximum APR of the loans marketed on the ad’s landing page. 

Payday Lenders Are Still Advertising with Google

You may notice that if you search Google for “payday loan,” you may not see ads in the search results. Google may show you the locations of nearby payday lending stores, and some of the top search results may be for companies that sell payday loans (which provides a hint for how payday lenders can get traffic without advertising in search results). But these are not placements through AdWords.

A search for related terms such as “fast cash,” however, may bring up ads for payday lenders such as Ace Cash Express.

How do payday lenders advertise with Google under the policies described above? Payday loans are designed to be repaid within two weeks and can have APRs of several hundred percents. Both characteristics would seem to exclude payday loans from AdWords.

How Companies Get Around AdWords Requirements

Payday lenders meet AdWords requirements by displaying landing pages that do not advertise payday loans. 

Try this experiment: Click through on a Google ad for a payday lender. Compare the page you land on through the ad to the lender’s actual home page. You might see zero references to payday loans on the ad landing page, but prominent references to them on the company’s home page.

Presumably, even without a direct reference to payday loans on the landing page, consumers will find what they’re looking for by clicking around on the company’s website.

The Intercept and American Banker are among the prominent websites that have criticized the way payday lenders have been able to exploit this loophole in the AdWords policy. And SearchEngineLand is among the websites explaining why the so-called ban appears to exist in name only and breaking down various ways advertisers get around it.

While Google AdWords has a financial product advertising policy that appears to ban payday loan ads whether they come from the lenders themselves, lead generators, or affiliate marketers, the reality is that such ads continue to exist. The only thing the “ban” appears to have done is that it’s changed what advertisers display on their landing pages.

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