The Office of the Inspector General for the Troubled Asset Relief Program (SIGTARP) has shut down 85 online mortgage modification scams, and says it is cooperating with an ongoing criminal investigation regarding Google suspending ad relationships with 500 advertisers.
“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. “Web ads that offer a false sense of hope may not be legitimate and can end up costing homeowners their home. SIGTARP is diligently working on every level to stop these frauds, to protect homeowners from being victimized, and to hold accountable criminals who defraud homeowners in connection with HAMP and other TARP programs.”
Consumer Watchdog, which calls out Google just about every chance it gets, and sometimes makes animated videos about related topics (remember Eric Schmidt as the evil ice cream man?), has put out a press release calling for Google to donate the “tainted revenue it received from deceptive ads preying on vulnerable homeowners to non-profit groups that help consumers with credit problems, including homeowners seeking to avoid foreclosure).”
Here’s the Schmidt video in case you wanted to see it again. It’s not really related to this particular issue, but it gives you an idea of Consumer Watchdog’s mentality towards Google:
Consumer Watchdog points to a report it released in February called "Liars and Loans: How Deceptive Advertisers Use Google". They highlight five recommendations they made in the report:
-- Google should be more diligent in screening advertising in areas such as mortgage modification and credit repair where fraud is known to be a serious problem. If the company finds that screening ads is not feasible, it should ban all advertising in areas where regulatory agencies have shown that fraudulent advertising is endemic.
-- Where fraud is a known problem but legitimate firms also operate, Google should use its advertising techniques to post public service ads that counter deceptive ads. For example, if a loan modification ad refers to the federal government, a Google-sponsored disclosure statement should appear prominently alongside to warn consumers that they should be wary of mortgage lenders using such terms.
- Google should initiate and help set industry-wide standards to prevent fraudulent advertising on the Internet.
-- Google should donate revenue it has received from questionable financial advertising to non-profit groups that help consumers with credit problems, including homeowners seeking to avoid foreclosure.
-- The Federal Trade Commission should begin using its legal authority under the Lanham Act to seek injunctions against search providers who accept large inventories of advertising from firms they have reason to believe are engaged in deceptive practices.
The report can be found here in its entirety (pdf).
"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 M. Simpson, director of Consumer Watchdog's Privacy Project. "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's willingness to accept such obviously deceptive advertising is the problem," Simpson said. "The company must take a proactive role in preventing deceptive ads that prey on vulnerable consumers."
You may recall that earlier this year, the Justice Department announced that Google had agreed to forfeit $500 million for allowing Canadian pharmacies to place ads through AdWords, targeting consumers in the U.S. resulting in what was described as “unlawful importation of controlled and non-controlled prescription drugs into the U.S.”
Google is not commenting on mortgage scam matter.