Speedy Money and Enably have increased their minimum loan term to 61 days, Nimble and Ferratum have extended theirs to 62 days, and Sunshine Loans, to 63 days. Australians have to pay extra if they take out hospital cover after the age of 30. Credit:Dominic Lorrimer "The structure of these loans are still harmful, burdening the customer with extra fees, charges and costs, and making their financial situations worse," said Gerard Brody of Consumer Action Law Centre. The booming payday sector has been heavily criticised for giving out loans with effective interest rates of more than 300 per cent that can send the poor and vulnerable into a debt spiral. 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. Nimble is a payday lender that has changed their loan terms so its ads can appear above Google search results. Credit:Esther Han He said Google was a hypocritical "psuedo-regulator" whose ad ban was simply a "feel-good stunt". "Why are they still accepting payment from lenders for search terms like 'payday loans'?" he asked. He also pointed out that a Google-backed lending startup, LendUp, had just been fined $US6.3 million for a range of deceptive practices such as charging illegal fees and miscalculating interest rates.

Google didn't respond to Fairfax Media's questions about whether its ban had backfired or was ineffective. Instead, a spokesperson said it would continue with the ban and take action against non-compliant ads and advertisers. "These actions include removing ads and permanently banning advertisers from using AdWords," she said. Google also banned ads in the US for products with annual percentage rates higher than 35 per cent. Mr Brody from Consumer Action Law Centre said he wanted to see that extended to Australia.

Fiona Guthrie from Financial Counselling Australia said while longer term loans weren't necessarily bad, payday lenders may start encouraging people to sign up for larger amounts. "I don't think Google's policy has necessarily backfired, as it may have helped reduce the really harmful products, which are the extremely high cost, short term debt traps," she said. Bessie Hassan, a money expert at Finder.com.au said her analysis of loans found the shortest terms tended to have higher annual interest rates. "For example, a nine-week term pays more interest in those 63 days than some three month loans," she said. "These loans can be an effective form of credit for some consumers, provided the borrower has the financial discipline to meet their repayments and pay down the debt as soon as possible."

Earlier this year, Nimble was forced to refund $1.6 million to more than 7000 customers after it was found to engage in irresponsible lending. An investigation into Nimble revealed the lender had used algorithms to assess customers that did not properly take consumers' financial information into account. The company also failed to recognise if consumers had obtained repeat loans from payday lenders within a short time. When Nimble did identify repeat loans it did not take steps as required by law before providing a loan to the consumer. None of the five lenders responded to Fairfax Media's requests for comment.