Google yanks alleged mortgage scammers' ads
Government inquiry led to action in shutting down 500 suspected mortgage-modification fraud advertising online.
This post comes from Marilyn Lewis of MSN Money.
The government working with Google this week shut down 85 mortgage-modification scams by targeting their online ads. CNET wrote that the Special Inspector General for TARP asked for and got Google's help in pulling some 500 online Google ads.
"Scammers targeted unsuspecting victims by buying key words from Google for search advertising," CNET explains.
TARP, you'll recall, is the Troubled Asset Relief Program, the Treasury Department program that received $700 billion from Congress to buy mortgage-backed securities and bail out failing banks after the 2008 autumn meltdown of the markets.
The CNET article says:
… the alleged scammers preyed on homeowners seeking to lower their mortgages through a program created by the bailout. The program, known as the Home Affordable Modification Program, offers homeowners who are having difficulty paying their mortgages a way to alter their payments to ease the burden.
CNET quotes Christy Romero, deputy special inspector general for TARP, who said, "Many homeowners who fall prey to these scams initially do so through these Web banners and other Web advertising."
Ads help scammers find victims
National Mortgage News writes, "The (government) office said Google's suspension of advertising relationships will have a dramatic impact on the ability of scam artists to find victims."
The investigation is not over, says the government's press release (.pdf file). It describes the problem ads:
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/or 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.
Consumer Watchdog, a frequent Google critic, says the Web giant shouldn't stop there. It's calling on 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."
In a separate action in August, Google agreed to pay $500 million in a settlement with the Justice Department over charges it "knowingly accepted illegal advertisements from Canadian online pharmacies for years," writes The Wall Street Journal.
The Journal continued, "… the company said it banned advertising of prescription drugs by Canadian pharmacies in the U.S. 'some time ago.' However, it said that 'it's obvious with hindsight that we shouldn't have allowed these ads on Google in the first place.'" Post continues below.
CNET wrote yesterday that Romero would not say if the government would "hold Google accountable for taking ads from allegedly rogue mortgage companies, or whether it would seek to fine the Web giant."
A Google spokesperson responding to Smart Spending's emailed request for comment, says that Google bans abusive ads and advertisers, "and we involve law enforcement when appropriate:"
… Google has strict policies covering the content of AdWords ads (available here) as well as the sites these ads take users to once they click (see page and site policies here and quality guidelines here). These policies and guidelines are enforced by both automated systems and actual human beings.
Google has a natural long-term financial incentive to make sure that the advertisements we serve are trustworthy so that users continue to use our services, and we aren’t afraid to take aggressive action to achieve that goal. For example, in 2009, we sued advertisers who were scamming users with fraudulent schemes [here], and last September sued rogue pharmacies trying to circumvent our policies and verification procedures [here].
Google encourages Web users to report ads they know or suspect to be problematic.
Tips for avoiding fraudsters
Mortgage fraud -- online and in-person -- has been high since the recession began. Much of it victimizes banks but the Google ads presumably involve scams that target homeowners who're looking for help modifying an unmanageable mortgage, avoiding foreclosure or using a short sale to dispose of a home that's lost value.
Mortgage fraud is hard to spot and to stop because it involves mortgage brokers, lenders, appraisers, underwriters, real estate agents, attorneys, developers, investors, builders, accountants, trust representatives and bank personnel. Some of them are licensed or registered, others are not, says the FBI, which devotes a section of its website to mortgage fraud. The bureau alone has 92 task forces and working groups assigned to mortgage fraud.
Some crimes involve homeowners as scammers. These "are fraudulently decreasing their income and property values to get their debt reduced for their loan modifications" and "fabricating hardships and filing false tax returns to this end," says the FBI, citing Interthinx, which publishes analyses of mortgage fraud.
States most affected have been California, Florida, New York, Illinois, Nevada, Arizona, Michigan, Texas, Georgia, Maryland, and New Jersey.
The Office of the Comptroller of the Currency has these tips and more:
- Never make an advance payment to get mortgage-related help;
- Talk over any plan you’re considering with a free HUD-approved housing or financial counselor. Call 1-888-995-HOPE (4673) or look at makinghomeaffordable.gov;
- Make your mortgage payments only to your lender or servicer. Don't give payments to anyone to make for you and don't let a "counselor" convince you to stop making mortgage payments.
Also, check the 10 warning signs of a mortgage modification scam or foreclosure rescue scam, at the bottom of this page (.pdf file). You'll be sure to recognize many of these appeals from Internet ads.
More on MSN Money:
- Should we tear down foreclosures?
- Weird stuff that hurts home values
- Calculator: Is it time to refinance?
- Return of the 20% down payment?
- Is it better to rent or buy?
- 10 first-time homebuyer mistakes
its good to see that Google is finally accepting some responsibility for what is on their search engines instead of pulling a ' i didnt do it' approach.
Glad the Canadian pharmacy ads are done they were a nuisance. Also glad Google is now doing something about these mortgage schemes.
Now when will they crack down on the "sex" related girl/guy type ads and viagra ads???? Oh and the get a mate/date type ads too? These type ads as such spammers...
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ABOUT SMART SPENDING
Editor Bev O'Shea lives and works in the foothills of the Appalachians. A former copy editor for The Atlanta Journal-Constitution and the Orlando Sentinel, she joined MSN Money in 2007. She's a fan of sunsets, college football and free shipping, among other things.
Having worked as a writer, reporter and editor for more than 25 years, Editor Julie Tilsner is the sort of person who can't help but correct grammar in Facebook postings and on billboards. She's written for BusinessWeek, the Los Angeles Times, Parenting, Redbook, AOL and others. She lives in Los Angeles County with her family and loves to drink wine and practice yoga, although not generally at the same time.
A writer for MSN Money since January 2007, Donna Freedman won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. She also writes about smart money tactics for magazines and on her own site, Surviving and Thriving.
Mitch Lipka has been warning people about scams and shining light on questionable business practices for more than 20 years. Mitch, the consumer columnist for The Boston Globe, has also been a reporter and editor at The Philadelphia Inquirer, Consumer Reports, South Florida Sun-Sentinel and AOL. He won the 2010 New York Press Club award for best consumer reporting online and was honored in 2011 for his reporting on child product safety.
Marilyn Lewis is an award-winning writer with a passion for getting readers clear, straight information that helps them stay out of financial trouble. A former reporter for The San Jose Mercury News, she works from her home in Port Townsend, Wash. Contact her at MarilynLewis@Outlook.com.
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