How Google can be bad for your financial health

It’s been twenty years since the dawn of the widely-used search engine – is it helping us save or damaging our finances?

Google it: watch out for wealth harming (Reuters)

This week marks the 20th anniversary of the day Google was incorporated as a private company and it’s now one of the planet’s best known brands.

More than 80 per cent of internet searches in the UK use Google, according to Jumpshot, and a recent Mozilla report into the health of the internet estimated that 90 per cent of the global market share for search relies on Google.

There’s plenty of debate over how much influence on politics and public opinion this gives the search giant, as well as how much influence one single organisation should have.

But there’s another important issue: the power of Google to affect your personal finances.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, says: “It has been 20 years since the birth of Google – the search engine was launched back when we were listening to Britney, watching Titanic, and looking things up in books.

“Since then, a number of other search engines have been fighting for our attention, but most people have got used to ‘Googling’ whatever they want, wherever they are, at any time.”

“It has changed our world, dramatically, not least when it comes to our finances. In many ways, internet search has transformed our money matters for the better.”

“Of course, few things are ever either entirely good or entirely bad, so there are ways in which search engines also make us more vulnerable. It’s why we should be making the most of the positives of search – and protecting ourselves from the potential downsides too.”

The positives are fairly obvious and save most of us an awful lot of money.

Google and other search engines allow customers to shop around for better deals and to find the best prices.

Search engines have prompted many financial services providers to publish guides and easy-to-read information to make themselves rank more highly when people search for information. And it makes it easier to find contact information and company information when we need a response to a financial gripe or query fast.

But the convenience of the internet doesn’t come entirely without risks. Search engines like Google and Bing may simply feel like just part of the internet furniture for many people, but there are still issues they need to be aware of to stay safe and financially healthy.

Finding a great deal from a bad firm

Google and other search engines make it so easy to find the best deal but that can lead to shoppers focusing only on price and not a company’s reliability.

Hargreaves Lansdown recommends doing a bit more research before making any purchase: “When you find a great deal through search, a few minutes checking with authorities like the FCA or Companies House, and Googling the name of the company and the word ‘review’ or ‘complaints’, could save you a great deal of trouble.”

Being followed round by the items you didn’t buy

Google’s algorithm is great for searches but it’s also focused its expertise on making advertising cleverer.

Ad technology via Google and other online platforms can make it more likely you succumb to an impulse purchase, as Vix Leyton, from the podcast Spenditwidely.com, explains: “With ad technology, items that you might really want but have sensibly decided against, haunt you round the internet like a ghost – I’ve given in to this quite often.

“It really puts paid to any notions of leaving it for a few days and if you still remember it then you actually want it.”

Finding wrong information

Primary schools are now teaching kids how to critically assess what information they find online but it’s all too easy to assume that a financial guide or blog is providing accurate information.

That information can be wrong, risking landing you in financial hot water if you’ve taken incorrect or misleading advice and applied it to your own finances.

Charles Brook, partner at insolvency practitioners Poppleton & Appleby, warns: “We have at least two generations of adults who now treat the internet as a primary source material and who make value judgements on the potential quality and value of a product or service based upon its ethereal online presence.”

While googling information can mean you’re much better informed, it’s always a good idea to check financial guidance with a reputable website like the Money Advice Service.

Being hit with a higher price

The price you see in the search results may not always be what you pay at the end.

Paul Went, product and markets director at Shawbrook Bank, says: “Many household consumer brands carry out the practice of ‘teaser’ pricing online where they use Google ads to advertise lower prices to capture attention of online shoppers.

“However, more often than not, customers end up paying more when they actually get to the checkout. We’ve long been a critic of this teaser advertising and believe that retailers and brands should advertise the final price to consumers upfront.

“All too often the process of shopping online for holidays, flights, hotels, train tickets, car hire, tickets to gigs or sporting events and personal loans is difficult, complicated and unexpectedly expensive. Sadly just trying to get what you were promised at the start of the process can feel like a battle.”

Falling into the hands of scammers

Google is actually remarkably clever at pushing scam websites lower down the search results but, depending on what you’re searching for, it’s still all too possible to fall victim to a scam you stumble on through a search.

Hargreaves Lansdown says: “If you go looking for the impossible, you’re not going to find the right answer, but you may well find scammers targeting the hopelessly optimistic. If, for example, something is sold out, it’s tempting to search to see if you can track one down. Scammers know this, and a search may well lead you to their sites.”

It's also a good idea to double check the web address of the site you’ve landed on. Google usually does a good job of prioritising genuine sites in the search results but it’s not infallible.

Just recently Richard Howard was sentenced for breaking consumer protection law. He ran three websites, including one that was found to be misleadingly implying it was the official passport application office. Visitors to the site would pay what they believed to be their passport application fee but the only “service” they received was a booking service, meaning they had to pay twice.

Many people who fell victim to Howard’s website did so because they found him via various search engines and believed the site was the official government page.

It’s all too easy to shop

Thanks to Google and other search engines, it’s possible to move from idly looking up an item to ordering it within a very short period.

Nathan Baranowski, managing director of tech agency Ojo Solutions, says: “Google always being accessible through our devices is damaging to all our financial health because it means we are unconscious consumers, moving through a purchasing process that has lost a lot of its pleasure; products are bought in one click and arrive in an hour.”

Search history can mean the adverts you’re shown are also very targeted, making it even easier to spend.

Rick Smith is managing director of Forbes Burton, a firm that helps businesses in financial difficulties.

He says: “Targeted online advertising, created by cookies and on social media, also creates a constant pressure to buy, especially when products are visually endorsed by celebrities. The targeted advertising and endorsements are often paired with typical marketing slogans of ‘buy now while stocks last’ or ‘sale ends soon’ which results in quick spending and causing strain on financial resources.”