SAN FRANCISCO -- A criminal investigation into mortgage swindlers has expanded beyond deceptive advertising on Google's Internet search engine to root out con artists who were luring their victims on Bing and Yahoo, too.
Monday's news of the widening probe confirmed that the Internet's three largest search engines had been turned into tools of prey for crooks looking to bilk homeowners scrambling to avoid foreclosure. The scams involved online ads which make bogus promises to help people hold onto their homes through a government-backed program to modify mortgage payments.
After finding their victims by using ads triggered by phrases such as "stop foreclosure," the swindlers extracted upfront fees or arranged to have the mortgage payments sent them without providing any assistance. The ruses had become increasingly common.
The crackdown had shuttered 125 mortgage scams by Monday, up from 85 last week, when the Office of the Special Inspector General for the Troubled Asset Relief Program announced that it was cleaning up the misconduct on Google. The U.S. Treasury Department division said many of the con artists bought ads on all three search engines.
The identities of the alleged swindlers haven't been disclosed, partly because the criminal investigation is still open. A spokesman for agency steering the investigation declined to provide further details Monday.
Like Google Inc., Microsoft Corp.'s Bing search engine agreed to stop accepting ads from hundreds of Internet advertisers and agencies tied to the scams. The ban also applies to Yahoo Inc., because it depends on Microsoft to sell its search advertising as part of a revenue-sharing partnership.
"Microsoft is committed to preventing fraud within its advertising network and online community and is working closely with the Special Inspector General for the Troubled Asset Relief Program to help tackle the problem of fraudulent mortgage-modification advertising," the software maker said in a statement.
The mortgage scams are the latest example of marketing malfeasance on large Internet advertising networks. Critics have complained that the largely automated systems for buying ads next to Internet search results are vulnerable to abuse and that the companies running them aren't doing enough to screen the marketing pitches before they appear on websites.
The criminal investigation into fraudulent mortgage ads is surfacing three months after Google agreed to pay $500 million to avoid prosecution in Rhode Island on charges that it profited from online ads by Canadian pharmacies that illegally sold drugs in the U.S.
Consumer Watchdog, a group that published a study about mortgage ad scams nine months ago, is calling for criminal charges and financial penalties against the major search engines in the current investigation.
"These Internet company executives were active enablers of fraud against vulnerable homeowners," said John Simpson, director of Consumer Watchdog's privacy project. "They cannot be allowed to benefit from these ill-gotten gains."
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