Google 'profited from illegal mortgage ads'
The federal government has shut down 85 websites it says were preying on vulnerable homeowners by offering dodgy mortgage deals through ads on Google.
The move comes just weeks after Google was forced to pay out $500 million to settle claims that it profited from Adwords ads for illegal Canadian pharmacies.
The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) says the companies were charging struggling homeowners a fee in exchange for false promises of lowering their mortgages through TARP’s own housing program, the Home Affordable Modification Program (HAMP).
The most common schemes included asking homeowners for an up-front fee and then telling them to stop paying their mortgage and to cease all contact with their lender. They included diverting mortgage payments to the scammers, transferring property deeds and releasing sensitive personal financial information.
As a result of the investigation, Google's pulled the ads of more than 500 internet advertisers and agents associated with the 85 alleged fraudsters.
"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," says 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 is now calling on Google to donate what it calls the 'tainted revenue' to a fund helping out the scams' victims.
It claism Google processed more than 74,000 monthly searches on the phrase 'stop foreclosure', with ads alongside costing an average of $8.29 per click.
"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," says John 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."