Google has decided to take its fight against the predatory loan to Play Store and has banned several ‘deceptive or harmful’ apps that were offering personal loans with a high annual percentage rate for 36 percent or higher. The search giant has banned such app in the United States for now. A personal loan, as defined by Google, is lending of money from one organisation, individual or entity to an individual customer for any purpose other than buying a fixed asset or education. It can include a peer-to-peer loan, a payday loan or a title loan but not a mortgage and even a student loan. According to a spokesperson of Google, the move is part of the expanded financial policy that was implemented earlier this year. The policy is aimed at protecting users against ‘exploitative’ terms.
The new rules ask personal loan apps to display their maximum annual percentage rate and also the maximum and minimum period for repayment. This is mandatory for both platforms that connect customers to third-party or help to generate leads and those that offer loans directly. Apps requiring repayment in full within 60 days are not allowed on Play Store by Google. According to a spokesperson of the company, policies of Google Play developers are designed to protect users and keep them safe. He said that the company’s financial services policy was expanded to protect customers from deceptive and exploitative personal loan terms.
Loans with very high-interest rates generally fall into the predatory lending category. In this, the lender uses deceptive and unfair practices to take advantage of the borrower. So even if you have exhausted all your options, think twice before giving your signature. The move by the tech giant follows similar action in 2016 when Google banned adverts for payday loans in its search browser. Several states of the US are planning a crackdown on unfair annual percentage rate in payday loans. In this series, California recently signed a law that implements a 36 percent APR on consumer loans of USD 2,500 to USD 10,000.