Google Fails to Understand Australian Protective Advertising Requirements

Oct 01 2016

Google Fails to Understand Australian Advertising Requirements

Goggle has recently made a big show of being a global small loans industry watchdog and 'banning' advertising for small loans under 60 days.  This global ban was supposedly necessary to 'protect' customers from what Google and other industry commentators report as being 'high interest rate' loans possibly leading into a debt spiral for customers.  Google could not be disuaded from this erroneous view even though Austrlain laws document the highly protective nature of the small loans industry in Australia.  (Click here for a short video on how Australian small loans - SACCs - really work and the many protections provided under the NCCP Act.)

To comply with Google's ban, lenders were forced to change their website landing pages to show an increase in their loan repayment times to longer than 60 days even though by doing so, the customer is actually worse off.

"Philips Johns, chief executive of the National Credit Providers Association, said Google had sparked the 60-day repayment period trend that saw customers ultimately paying more for a loan."

"Those who could pay it off in a month are now paying more," he said.

He said Google was a hypocritical "psuedo-regulator" whose ad ban was simply a "feel-good stunt".

Advertising for some products via Google Adwords has simply changed the ‘landing pages” that are directly linked to the Google Adwords link. It has not made any difference to the provision of Small Amount Credit Contracts (SACCs) under the National Consumer Credit Protection Act except that people searching and landing on a lender's page will pay more for a longer term loan even if they could have paid it out sooner and therefore got a cheaper loan. 

Google, along with many small loans commentaters and the media, mistakenly perceive longer loans as being more affordable to borrowers but Google and these commentators do not understand how the cost of loans is actually calculated under the NCCP Act.

Furthermore, headlines that Google's ban is providing protections for  "payday loan" consumers against "payday lenders" are totally misinformed, as the Australian Government banned payday loans back in 2013 and Australia has the most highly regulated and safe small loans product providing globally unprecendented consumer protections.

Furthermore, Google has taken rather an ad hoc approach to the application of their ban which has resulted in some lenders being able to display certain information on their website landing pages whereas others lenders may have been prevented from displaying the same information.  This demonstrates that Google staff seem not to understand their own company policies.

For more information on how SACC loans really work to protect Australian comsumers visit the industry website