Google Suspends over 500 Fraudulent AdsWritten by Pace Lattin
November 21, 2011 # 12:38 pm # Industry News, Legal Challenges # 4 Comments
MoneyLife.com – Google finally acknowledges that when advertisers are seedy small businesses the publisher has greater responsibility in accepting such advertisements
Consumer groups have been complaining for years about proliferation of fraud ads on Google — and at least one organization has demanded that search engine giant donate its proceeds from the tainted ads to consumers who have lost their homes. This is a controversy relating to bogus mortgage ads, which have appeared on Google AdWords, according to ConsumerAffairs.com. This brings us to the basic question, who is responsible for the ramifications of the ads- the advertiser or the publisher? Given the size and influence of Google, the answer is clearly the publisher. However, sometimes Google’s “Do no evil” mantra seems to really be shorthand for, “Don’t get caught helping others do evil.”
Now, ConsumerAffairs.com said that a federal agency is opening a criminal investigation of at least 85 companies that use Google AdWords to sell mortgage modification services. Google saw the light and said it is suspending more than 500 advertisers who claim to provide services for troubled homeowners.
Unlike newspapers, magazines and broadcast outlets, Google imposes few restrictions on advertisers, relying on guidelines that are often more technical than substantive. The automated AdWords system tries to block certain types of objectionable ads, Google has said, but in most cases, there is no actual human review of an advertisement. Google and other online ad outlets argue that it would be too expensive for them to manually review ads or vet would-be clients. However, not doing so leaves consumers ripe for fleecing, consumer groups have long charged.
ConsumerAffairs.com said that for years, the search engine giant looked other way as online pharmacies used Google AdWords programme to illegally sell prescription drugs online, often without a prescription or across borders. Google recently paid $500 million, one of the largest forfeitures in US history, to settle federal allegations related to the drug ads.
“Google should never have published these ads, but its executives turned a blind eye to these fraudsters for far too long because of the substantial revenue such advertising generates,” said John Simpson, director of Consumer Watchdog’s Privacy Project to ConsumerAffairs.com
“The company cannot be allowed to benefit from these ill-gotten gains. Google must donate the money to aid homeowners who were victimized because of its callous quest for profits. Google is highly motivated to turn a blind eye to all sorts of dubious advertising on its search engine because AdWords is such a cash cow,” Mr Simpson told to ConsumerAffairs.com.
“The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that’s precisely where they are being taken advantage of and targeted,” said Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP) in the report. “Web ads that offer a false sense of hope may not be legitimate and can end up costing homeowners their home.”
Romero said SIGTARP has initially shut down 85 alleged online mortgage modification scams that prey on vulnerable homeowners through web banners and other web advertisements.
According to ConsumerAffairs.com and Consumer Watchdog, Google processed more than 74,000 monthly searches on the phrase ‘stop foreclosure’, with ads alongside costing an average of $8.29 per click, for a monthly total of $613,460, a figure one knowledgeable Internet executive who spoke on the condition of anonymity said was far too low.
The most common schemes included asking homeowners for an up-front fee and telling homeowners to stop paying their mortgage and to cease all contact with their lender. The schemes included diverting mortgage payments to the scammers, transferring property deeds, and releasing sensitive personal financial information. In some instances, the Web sites claimed to be affiliated with the U.S. government through the use of a government seal or name similar to a government agency.
Google’s suspension of these advertising relationships will have a “dramatic and immediate impact” on the ability of scam artists to seek out and victimize unwitting homeowners, Romero said to consumeraffairs.com. Of course, those already victimized by the scams might say the impact would have been a lot more dramatic if the ads had never been allowed to appear in the first place.