Is Google's anti-scam agreement with regulator effective?

Wednesday, 19 July 2023

After millions of dollars of losses to investors, Google agreed to work with New Zealand’s financial watchdog to get adverts for scams blocked from the internet search giant’s Google Adwords service.

But it appears the first engagement did not yield the hoped-for result.

A fake term deposit comparison website was still appearing as a “sponsored link” on some searches done through Google, weeks after the Financial Markets Authority (FMA) Te Mana Tātai Hokohoko reported the scam to Google on June 27.

Since February, fake term deposit comparison websites have been used to con people into handing over their contact details, then calling them to convince them to send their money to “invest” in term investments that don’t actually exist.

The scammers targeted people by paying Google to put “sponsored” ads for their fake comparison websites at the top of search results pages for searches containing specific combinations of words relating to term deposits.

The outcry over mounting losses put the spotlight on the internet giant’s efforts to protect New Zealand users from scammers, and how they compared to its efforts overseas.

Google has been rolling out anti-scam advertising scheme around the world, but appears to have no immediate plans to include New Zealand.

Google’s “financial verification” scheme is already in place in Australia, Singapore and Taiwan, and countries including the United Kingdom, where it is being hailed as a success.

On June 18, the FMA appeared to be frustrated with Google over its failure to deploy the system in New Zealand.

“We have been trying to work with Google on the expansion of its financial advertisement verification programme into NZ,” an FMA spokesperson said.

But Google did agree to work with the FMA on blocking scam ads.

“Google has requested that when the FMA becomes aware of scam websites and issues a warning, we advise Google,” an FMA spokesperson confirmed.

But despite the June 27 contact, a fake term deposit comparison website came up when the search terms “RBNZ term deposit rates” was used.

However, it no longer came up as a sponsored ad when other combinations of words relating to term deposits were searched.

Google said it was committed to combatting financial fraud in ads, and blocked some 198 million financial scam advertising attempts around the world in 2022.

It said it now required all Google advertisers to verify their identity, disclosing information about their businesses, where they operated from and what they were selling or promoting.

Google said it had “strict” rules about how advertisers could market financial products and services.

“When we find ads that violate our policies, we act quickly to remove them,” it said in a statement.

Checking ads involved both human and automated systems, it said.

Google also said it now hoped to add New Zealand to the list of countries covered by the anti-scam advertising scheme it has in place overseas.

“We hope to bring this policy to New Zealand in the near future, but in the meantime have encouraged the FMA to escalate any suspicious ads to us for review,” it said.

Google also invites members of the public to alert it to scams through an online whistleblowing link.

New Zealanders have been hit by a staggering wave of fraud and deception crime, the latest Crime and Victimisation Survey shows.

The survey is compiled for the Ministry of Justice through public surveys to estimate annual crime levels, with the latest report based on data collected between November 2021 and November 2022.

It found the annual number of fraud and deception crimes had risen to 510,000 from 288,000 the previous year, with more than 90% of those crimes not reported to police.

One in 10 adults said they had been a victim of fraud or deception.