Google profits from ads promoting ‘instant’ money and loans delivered ‘faster than pizza’ despite pledging to protect users from ‘deceptive and harmful’ financial products.
The adverts were shown to people in the UK who searched for terms such as “quick money now” and “need financial help” and directed users to companies offering high interest loans.
One, listed in Google search results above links to the government website and debt charities, promised “guaranteed money in ten minutes” for people with “very bad credit”.
The Advertising Standards Authority said last night it was assessing 24 adverts identified by the Observerpaid for by 12 advertisers, including loan companies and credit brokers as well as suspected scammers.
The regulator said many of the promotions were likely to breach rules on socially responsible advertising which state that advertisements must not “trivialize” loan underwriting. “A disproportionate emphasis on speed and ease of access to interest rates is likely to be considered problematic,” according to its guidelines.
Google said ads flagged with it violated its policies and had been removed. He previously pledged to fight “predatory” loan promotions, banning ads for payday and high-interest loans in 2016.
The promotions appeared to clearly violate its policy, explicitly referring to “payday loans” and linking to websites offering ultra-high interest rates of up to 1,721%. Many ads removed by Google on Friday had been replaced by similar promotions within hours, some from the same advertisers reported by the Observer.
It comes amid a growing cost of living crisis, described by the Institute for Fiscal Studies as the worst financial crisis in 60 years.
Households are battling rising prices on multiple fronts, including rising energy bills, grocery costs, and gasoline and diesel prices, compounded by supply chain disruptions and issues caused by the pandemic, Brexit and the war in Ukraine.
Charities and debt campaigners have said such loans could trap people in financial difficulty, who may impulsively apply and find themselves “trapped in a spiral”.
Adam Butler, head of policy at debt charity StepChange, said financially vulnerable people were most likely to be drawn in “due to a complete lack of borrowing alternatives”. “Repeated use of 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 hard to get out of,” a- he declared. “With the cost of living crisis set to get even worse in the coming months, there is every chance that we will see an increase in the number of people forced to turn to this type of loan just to s ‘get out.”
Many promotions appeared to be deliberately aimed at people in financial difficulty, with messages such as “bad credit, welcome”. They suggested there would be little review with messages such as “no credit check” and “no call”.
An ad read: “Instant payday loans paid in 10 minutes. Bad credit OK, irrelevant credit history. Another company described the loans available as suitable for “small emergencies”.
Another website, Tendo Loan – one of the most prolific advertisers – claimed to offer: “Cash in 10 minutes guaranteed. 3-36 months. No credit checks! It added: “A loan delivered faster than pizza! 2 minutes to apply and 10 minutes to deposit to your account. Apply 24/7. Tendo Loan did not respond to requests for comment.
The Financial Conduct Authority said adverts suggesting the loans were ‘secured’ or involved ‘no credit checks’ were misleading. He said companies should not make ‘false’ claims, such as suggesting that credit is available regardless of a customer’s financial situation or status, and could be subject to action execution.
In some cases, the advertisements appeared to be linked to fraudulent websites, redirecting users to websites where they entered their personal information, including banking information, phone number, date of birth and address.
Yvonne Fovargue, chair of the all-party caucus on debt and personal finance, described the ads as “online harm” and called on Google and the government to tackle them.
“It’s an obvious targeting ploy for people on the edge who, instead of taking out a loan, should seek debt advice,” she said.
The ASA has previously ruled against payday lenders and said it is evaluating evidence of potential violations.
He added that while “responsibility ultimately rests with the advertiser”, media platforms such as Google “also have some responsibility to ensure that content complies with the rules”. “Platforms should and are taking steps to ensure misleading and irresponsible ads are not posted,” a spokesperson said.
Google said, “We have strict advertising policies in place for financial services products and prohibit ads for payday loans. We have a dedicated team working to protect users from malicious actors trying to evade detection. In 2020, we blocked or removed over 123 million ads for violating our financial services policies. »
Stella Creasy, anti-payday lending campaigner and Labor MP for Walthamstow, described companies offering super-high-interest short-term loans as ‘legal loan sharks’ who seek to ‘exploit’ people’s financial difficulties. “We need the government and regulators to remain constantly vigilant and act to stop these companies before they make a bad situation worse for so many people,” she said.