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In 2015 both Facebook and Google decided to stop payday loan companies from advertising on their websites.
This action came about after they came under pressure from consumer groups who were concerned with the impact that payday loans were having on the most vulnerable in society.
Although this ban has been in place since 2015 it has not prevented short-term loan providers from finding new ways around the ban. Once of these ways is a method called “Cloaking”. Clocking has been blamed on influencing the 2016 American presidential campaign and the spread of fake news which will influence people’s views.
Cloaking is a tactic used to avoid detection by Facebook and Google and get around their ad ban.
It is worth noting that the ban only considers paid advertising and not the organic listings on Google or individual company pages on Facebook.
Cloaking is a simple trick. When Facebook or Google spiders crawl a site to determine the content the advertiser will present to the spider a front end that complies with the rules which fools the spiders into believing the content to be conforming to their advertising guidelines. When a human visitor clicks on the link they see a completely different site to the one which the spiders will not have picked up on.
The ban on payday lenders advertising in Facebook and Google originated in the U.S where pressure groups from the civil rights and human rights movements forced the two internet giants to stop payday lenders from advertising on their platforms. Once the ban was in force in the U.S it was applied worldwide.
What is a payday loan? Well according to Google this would be any:
“personal loan which require repayment in full in 60 days or less from the date on which the loan is issued (we refer to these as “Short-term personal loans”).This policy applies to advertisers who offer loans directly, lead generators and those who connect consumers with third-party lenders.”
It is important to keep in mind that even though both Facebook and Google have banned paid advertising on their platforms they have not banned the presence of payday loan companies from either platform and people searching for payday loans for bad credit for example will still be able to find them on Google organic listings.
The Google and Facebook ban comes hot on the heels of the Financial Conduct Authority ruling in 2014 which placed caps on the amount of interest can be charged on a payday loan. This rule protected consumers even further as it prevented a borrower from ever paying more than double in interest and fees combined.
Both Google and Facebook have acted in good faith and any decent individual would applaud their efforts to combat predatory lending which coerces the most vulnerable in our societies to take out loans which they can ill afford to pay back.
Google have a raft of ad policies which specify which are not allowed.
A quick search on Google will reveal many tutorials on how it is done. The main purpose of cloaking is to tell the search engine one thing but show the human visitor another therefore bypassing Googles and Facebook ad ban.
Cloaking on Facebook or cloaking on Google helps the company rank their website position higher in the search results. In the long run Google will find these sites and issue penalties in the form of de-indexing the sites from the search results sending the website into digital purgatory never to be seen again.
When the ban came into place many payday loan direct lenders companies raced to find a solution around the new restrictions or they faced the possibility of going out of business. So, they came up with the idea of using cloaking to get around the ban.
Some may say that they acted to save the livelihoods of their employees whilst they found a more long-term solution. In the end most payday lenders simply changed the loan duration to more than 60 days to satisfy both Google and Facebook. There are still those payday lenders out there who still practice cloaking and they are being hunted down by Google and Facebook.
This is difficult question to answer since only Google and Facebook spiders can see the “cloaked” site whereas us humans will see the real site.
When the ban came into effect most legitimate payday lenders simply adjusted their minimum short term loans periods to more than 60 days along with adjusting the APR so that would comply with the new rules.
Facebook and Google are constantly on the lookout for sneaky practices like cloaking and thereby doing their part in preventing people from being drawn into loans which they may be ill suited for.
Facebook and Google could almost be considered the “Internet”, there is nothing which escapes their attention on the clear web. They use both machine learning and human effort to identify and close these cloaked sites or pages.
Facebook and Google do not make public how they locate the cloaked sites for reasons of security which if known could be used by other “bad actors” to conceal their true content from Google and Facebook.
It is incumbent on the both Facebook and Google to act against those businesses and individuals that wish to deceive the public using nefarious methods to get around rules that were created to protect people from businesses advertising high-cost payday loans.