Payday lenders will be banned from advertising on Google from 13 July.
From this date, the search engine giant will no longer allow ads for loans where repayment is due within 60 days of the date of issue from appearing on its site globally.
It is also separately banning ads for loans with an APR of 36% or higher in the US.
Payday lender Wonga, for example, offers short-term loans at an APR of 1,509%, which need to be repaid between one and 35 days.
David Graff, director of Google’s global product policy, says: “Research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that.
“This change is designed to protect our users from deceptive or harmful financial products.”
The move won’t however, affect companies offering loans such as mortgages, credit cards, car loans, student loans, or commercial loans.
The decision by Google is another blow to the controversial payday loan sector, which has faced a crackdown by regulators in recent years.
In 2015, a number of new rules were introduced for payday lenders by the UK’s financial regulator, the Financial Conduct Authority. These include capping the cost of short-term loans at 0.8% per day, and ensuring borrowers never have to repay more in fees and interest than the amount borrowed.
Here at Moneywise, we’ve never advertised payday loans on our website or in our magazine. See How we make our money for more on this.