On behalf of the Federal Trade Commission, a federal court issued a restraining order against Yahoo, MSN, AllTheWeb, and Altavista to prevent the search engines from allowing mortgage finance scammers to use a government URL in sponsored search results, thus representing themselves as the operator of the site.

Homeowners seeking to take advantage of President Obama’s Making Home Affordable program encountered sponsored links on the search results pages appearing to lead to the US government’s makinghomeaffordable.gov. Clicking on the links, however, redirected searchers to sites “purporting” (FTC’s word) to offer paid loan modification services. Others sought personally identifying and confidential information to sell to companies who offer refinancing.

Aside from the search engines allowing advertisers to cloak their URLs as a .gov website, the FTC did not identify specific offenders because “the defendants have cloaked their practices in the anonymity of the Internet.” The FTC is demanding the four search engines identify those who paid them to place the ads and to refuse to place paid ads containing active hyperlinks to .gov websites.

 “Homeowners who are down on their luck need help, not misdirection by Internet impostors,” FTC Chairman Jon Leibowitz said. “The Commission will continue to work with the Treasury Department to move quickly against scammers who prey upon financially distressed consumers.”

Treasury Secretary Tim Geithner, Chairman Leibowitz, and US Attorney General Eric Holder announced last month a multi-agency crackdown on foreclosure rescue scams and loan modification fraud. The FTC advises victims of fraud of this nature to contact the FTC at 1-800-FTC-HELP. TARP (Troubled Asset Relief Program) related fraud complaints can be filed at www.sigtarp.gov .