Google is suing after the Consumer Financial Protection Bureau ordered surveillance of its payments arm

The (CFPB) on Friday said it has ordered federal oversight of Google Payment Corp. after determining that it meets the legal requirements for such surveillance. The CFPB oversees banks, credit unions and other financial institutions, and recently finalized legislation to oversee digital payment applications. In the letter, which focused on the Google Pay app and the peer-to-peer (P2P) payment service (which was suspended in the US earlier this year), the CFPB said it had “reasonable grounds to determine that Google engaged in conduct that posed a risk to consumers.” Google filed a lawsuit shortly after the announcement to challenge the decision, reports.

The risks identified by the CFPB relate to Google’s handling of fraudulent activities and fraud prevention. Based on customer complaints, the order said it appears that Google did not adequately investigate the erroneous referrals, or adequately explain the findings of its investigation into these issues. The complaints also show that Google did not do enough to prevent fraud, the order said. But, the CFPB’s announcement notes that the order “does not include a finding of wrongdoing by the entity,” and “does not require the CFPB to conduct a regulatory review.”

In a statement to A Google spokesperson said, “This is a clear case of government fraud involving Google Pay peer-to-peer payments, which have never been exposed and are in the US, and we are challenging it in court.” The CFPB’s order acknowledges that Google Pay has been suspended but says that this is “not a basis for avoiding designating Google for oversight,” although it may affect whether it decides to conduct an audit.