Last week, Google announced it would no longer include ads for payday lenders — financial services, outlawed in many states, that offer short-term, small-dollar loans, often with triple-digit interest rates — to protect “users from deceptive or harmful financial products.” All the while, Google’s parent company is investing in a startup that offers loans with annual percentage rates as high as 600%.
LendUp actually refers to itself as a “payday loan alternative,” but as the Wall Street Journal notes, it offers loans with terms as short of seven days that have APRs in line with traditional payday lenders. Thus, by Google’s recently announced rules, paid ads for these LendUp products will be barred from Google search results starting July 13.
At the same time, according to the Journal, Google’s parent company Alphabet Inc. has a stake in LendUp through GV, Alphabet’s venture-capital investment division. In fact, GV’s investment in LendUp goes back to 2012.
Neither LendUp nor GV were involved in Google’s decision on the payday lender ban — which only affects paid ads, not the actual search results — but the startup says it has since talked to Google to get a better understanding of the ban.
“We do worry about how this will play out and think it paints with too broad a brush,” the LendUp CEO explains.
by Chris Morran via Consumerist
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