Google AdWords rules regarding payday loans

In May 2016 Google announced its AdWords service would impose a ban on all payday loan advertisements.

Under the new rules, which came into effect in July, advertisers for what Google calls “personal loans” can face a ban if those advertisers have loan terms that require the borrower to repay in full in 60 days or less, or for loans that carry an annual percentage rate (APR) of more than 36%. In theory this eliminated all payday loans, which typically are due within two weeks, and can have APRs of more than 300%.

We reiterate that’s in theory.

The rules state the loan terms must be stated by the advertiser in a disclaimer on their site and applies to direct lenders, lead generators and advertisers who connect third parties with borrowers.

What changed?

A simple search for "payday loans" in Google still brings up numerous paid links at the top of the search results page.

However, they are not direct payday lenders.

They are the “lead generators” which collect the personal information of consumers, may run a credit check, and then on sell the lead to payday lenders, based on the type of loan and what the consumer can afford.
Because lead generators are removed from the actual process of lending, they can list terms that fit with Google AdWord’s payday loan policy on their advertising landing pages and they have the added advantage of not being bound to those terms.

The terms as listed in the disclaimer on the landing pages linked to from a lead generators’ advertising vary, but they often use terms that fall within Google’s policy range. However they also make clear the actual APR could sit outside that range (be potentially higher). Here are some examples:

The “Fees and Interest” page at one lead generator’s site reads: “Rates start as low as 6.59%-35.8%,” and then: “For those that do not meet a personal loan minimum requirements, alternative loan solutions may be offered to you, where the above rates do not apply.”

Google is certain to fine-tune the policy and its implementation over time and this may force those in the payday loan industry to look for alternative ways to promote their product. If anything where PPC for search visibility may have worked for many, those that have implemented a long-term SEO strategy might be who benefits here.