The online payday loan industry was dealt a serious blow Wednesday when Google banned it from its advertising networks. But short-term, high-interest lenders still have somewhere to go, for the time being at least: Microsoft’s Bing, which powers much of Yahoo’s search operation and is a distant number 2 in the search market.
Bing has not announced a ban on the lenders, who Google described as peddlers of “harmful financial products.” Instead, Microsoft told BuzzFeed news that it “respects the integrity of consumer choice” and is “listening to consumer and industry feedback with respect to payday lending ads.”
A Microsoft spokesperson pointed to its own policies, which say that advertisers “must ensure they comply with all applicable local laws and regulatory requirements” and that advertisements for payday loans, along with other types of consumer financial products, “can raise appreciable compliance concerns and may attract heightened scrutiny.”
According to data from comScore, Google has 64% of the desktop search market, while Microsoft has just over 21% and Yahoo has 12%.
Before Google’s payday lending advertising ban — which will take effect in July — it had instituted policies specific to the industry, such as only allowing ads to show up when people searched for loans specifically, and requiring lenders to disclose rates and terms in the ads.
Google says “no more” to payday loaners
The company says that from July 13, 2016, they won’t allow payday loan ads where the credit is due within 60 days of the date of issue. This new policy is global, but for the US, Google will also ban ads for loans with an APR of 36 percent or higher.
Google explains the new policy is specifically aimed at harmful ads that don’t have the user’s best interests at heart, and will not affect ads for trusted loaning services such as for mortgages, car loans, student loans, commercial loans, and revolving lines of credit.
Google’s ban on payday loans comes after some intense scrutiny from the US government, who’s been cracking down on these types of businesses. The move will also cost the company millions in revenue.
Microsoft outlaws ads for tech support scams
One day after Google’s announcement came more good news, this time from Microsoft, who also moved to clean up their advertising business.
The company announced changes to its advertising policy, banning ads that provide tech support or password recovery services. These types of ads were commonly seen in tech support scams, something that over 175,000 Microsoft customers complained about last year.
The policy changes Microsoft made are the following and are directly aimed at companies that provide support for services they don’t own (Company X providing support for Company Y’s service) and companies that offer services that only the service owner can (password or data recoveries).