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Google is benefiting from ads promoting “instant” cash and loans delivered “faster than pizza,” despite promises to protect users from “deceptive and harmful” financial products.
The ads were served to people in the UK searching for terms like ‘quick money now’ and ‘need money help’, directing users to companies offering high-interest loans.
One, listed in Google search results via links to the government website and debt organizations, promised “cash guaranteed in 10 minutes” for people with “very bad credit.”
The Advertising Standards Authority said last night it was evaluating 24 ads identified by the observerpaid for by 12 advertisers, including credit companies and loan brokers, and suspected scammers.
The regulator said many of the promotions were likely to violate socially responsible advertising rules, which say ads must not “trivialize” taking credit. “A disproportionate emphasis on speed and ease of access compared to interest rates is likely to be seen as problematic,” the guidance reads.
Google said the ads flagged with it violated its policies and were removed. It previously pledged to crack down on “predatory” lending and ban ads for payday and high-yield loans in 2016.
The promotions appeared to be clearly in violation of his policies, as they specifically referred to “payday loans” and linked to sites with ultra-high interest rates of up to 1721%. Many of the ads Google removed on Friday were replaced within hours by similar promotions, some from the same advertisers flagged by the observer.
This comes amid a growing cost-of-living crisis, which the Institute for Fiscal Studies has dubbed the worst financial strain in 60 years
Households are grappling with price increases on multiple fronts, including rising energy bills, food costs and petrol and diesel prices, compounded by disruptions and supply chain problems caused by the pandemic, Brexit and the war in Ukraine.
Charities and anti-debt activists said such loans could trap people with financial problems who could apply spontaneously and be “caught in a spiral”.
Adam Butler, policy manager at debt relief firm StepChange, said that financially vulnerable people are most likely attracted “due to a total lack of credit alternatives.” “Repeatedly using these types of products to make ends meet – often the reason people turn to this type of borrowing – can trap people in a spiral that is very difficult to break out of,” he said. “As the cost of living crisis continues to escalate in the coming months, there is every chance that the number of people forced to turn to this type of credit just to make ends meet will increase.”
Many of the promotions appeared to be deliberately aimed at people in financial difficulty, with messages such as “bad credit welcome.” They suggested that with messages like “no credit check” and “no call,” there would be little scrutiny.
One ad read: “Instant payday loans paid off in 10 minutes. Bad credit OK, credit history irrelevant.” Another company described available credit as suitable for “small emergencies”.
Another site, Tendo Loan – one of the most prolific advertisers – claimed to offer: “Cash in 10 minutes guaranteed. 3-36 months. No credit check!” It added: “Loans delivered faster than pizza! 2 minutes to apply and 10 minutes to fund your account. Apply 24/7.” Tendo Loan did not respond to requests for comment.
The Financial Conduct Authority said advertisements suggesting loans were “guaranteed” or “do not include credit checks” were misleading. It said companies should not make claims that “are not true, such as B. the assumption that credit is available regardless of a customer’s financial circumstances or status’ and that they could face enforcement action.
In some cases, ads appeared to be linked to deceptive websites that redirect users to websites where they enter their personal information, including bank details, phone number, date of birth, and address.
Yvonne Fovargue, leader of the all-party parliamentarians for debt and personal finance, described the ads as “online harm” and called on Google and the government to take action.
“It’s an obvious target trick for people at the end of their tether who, instead of taking out a loan, should seek debt counseling,” she said.
The ASA has previously ruled against payday lenders, saying it is reviewing evidence of possible violations.
It added that while “the money ultimately stays with the advertiser,” media platforms like Google also “have some responsibility for making sure the content follows the rules.” “Platforms should and will take steps to ensure misleading and irresponsible ads are not posted,” a spokesman said.
Google said: “We have strict advertising policies regarding financial services products and prohibit payday loan ads. We have a dedicated team working to protect users from malicious actors trying to evade detection. In 2020, we blocked or removed more than 123 million ads for violating our financial services policies.”
Stella Creasy, an anti-payday loan activist and Labor MP for Walthamstow, described the firms offering ultra-high-yield short-term loans as “legal loan sharks” trying to “exploit” people’s financial difficulties. “We need government and regulators to remain constantly vigilant and act to stop these companies before they make a bad situation worse for so many,” she said.
