Google tightens rules on pay-day lenders

PAY-DAY lenders were dealt a blow yesterday as web search engine Google laid down new rules on the way they advertise online.

Firms advertising through Google will now have to meet strict new terms and conditions that include forcing them to clearly set out their APR on their homepage and having to explain how they collect repayments.

The measure comes a fortnight after pay-day lenders set out a new system of voluntary regulation that was dismissed by critics as failing to address the problems in the booming industry.

Britain’s best known pay-day loan firm is Wonga, which has moved to take advantage of soaring demand for finance by extending the period over which borrowers can take out loans. The controversial measure, put in place to cover the Christmas period, means consumer can now take out debt for 45 days, up from the previous 30.

The limit was raised to 60 days for the first week of this month, but the lender – which charges a typical APR of 4,214 per cent – denied that the change was designed to exploit Christmas spending pressures.