Google made news today by revealing that they will ban advertisements from PayDay Lenders. This is a huge deal, and major win for those fighting against predatory lending practices. Now that everyone has a computer in their pocket via their smartphone, it’s only natural that these lenders would want to invest heavily in internet advertising.
“We’ll continue to review the effectiveness of this policy, but our hope is that fewer people will be exposed to misleading or harmful products,” Google global product policy director David Graff said in a blog post about the change.
Mislead and harm. That’s exactly the nature of the advertising done by predatory lenders, especially online. But let’s talk about how these lenders present themselves OFFLINE too.They are in every hood, seemingly on every corner, stripping away any disposable income of the poor and working class, and they even creep in to the suburbs targeting those with little to no savings, that are living paycheck to paycheck. I understand what it’s like to not have a dime, to not know how a bill is going to be paid, to float a check praying it doesn’t bounce. And in the past I’ve turned to these types of loans out of desperation, which is why I feel comfortable telling you:
DON’T DO IT!
Here are the primary culprits of predatory lending:
PAYDAY LOANS– It’s never a good idea to spend money you don’t have. Payday Loans don’t only encourage this bad money practice, but they make huge money by doing it. In most cases you end up paying about double what your borrowed.
PERSONAL SUB-PRIME LENDERS- These lenders advertise to you by claiming they are better than payday and title loans. They typically send you flyers in the mail telling you that you are pre-approved up to $1500, $6000, or some other arbitrary number. The fees are still super high, and majority payments go toward interest and fees and not principal.
TITLE LOANS- If you have a car that’s free and clear, refrain from leveraging it as an asset. Your cars main function is to get you to and from your source of income. If you had an auto loan that you paid off, a title loan is just adding to the fees you’ve already given to another lending institution. If you purchased your car cash, this is not just taking advantage of your asset as they adverise. The likelyhood that you’ll have the funds to payoff the loan in 30 days is slim to none. You’ll keep paying an majority fees and interest only payment until basically extend the loan time another 30 days. You’ll be taking a huge step backwards from the accomplishment of paying off your car. You may be able to get a collateral personal loan or refinance with your credit union, for much more reasonable payment terms.
Even if you are facing repossesion or eviction, adding one of these loans to your debt will only add to your stress. It’s not worth the money, you walk out of the door in an even worse position than you entered into.It’s an intentional cycle set up to keep you in debt and prevent you from escaping poverty.I am so happy that Google is taking a stand. It’s a huge deal for a major company to turn away money from such a huge industry, and I’m glad Google is standing on principle and joining the fight for reform. Hopefully other search engines, and other media platforms(radio, tv) will follow their lead.