There is much speculization along these lines. The owner of a large affiliate Web site told me a couple months ago that he believes Google penalized him after he started and stopped an AdWords campaign. (His bill was paid.) His theory is that Google didn't want to give him free traffic once the company knew he had money to spend.

I do not think that Google penalizes your website for not paying. I had a client who stopped doing PPC for a 3 month period and had a small balance with Google. His rankings did not drop, but after 3 months he started his PPC campaign again and cleared up his balance.

Seems like a coincidence, but I wouldn't doubt at least some minor relationship between the two.

On the surface, this looks the usual case of SEO paranoia that so permeates WMW and a couple of other forums. The ridiculous ideas they pass around are just so unbelievable.

But who knows? Maybe Google is implementing a little "Pay your bill" penalty. It would be more reasonable than the old "Either take out an adwords account or lose your rankings" nonsense that people used to pass around (and maybe still do).

In case the distinction is not clear, what I mean is that the presumption that Google targets specific businesses and industries with penalties in order to pressure them into paying for ads is absolute nonsense (but it has been voiced often at WMW).

On other hand, it would make good business sense for Google to penalize sites that owe them money, with the understanding they would lift the penalty once the bills are paid.

People who intentionally shoot themselves in the foot really don't deserve any sympathy, though.

Oops ...
Friday my card got cancelled due to a fraud case.
Monday Google complained they could not charge my card (obviously). They choose their moments ;-)
It takes a while to get a new card, especially with all these May holidays in Europe.
I'll keep you posted if ranking drops before I'm able to resume (although it should only take another week, max.)

One of my friend has left his adwords accound due payment unpayed and eventually cancelled. After few month he has lost many of his organic ranks.
But he also did some unwise changes on the site which should also result rakn drop. We both wonder it is due to the changes or that unpayed balance.

Our website was on page one in Google search results for background search. Then the homepage completely disappeared from Google search results. A 2nd level page still showed up, but it always was a ways down the list on search results. This seemed very strange that Google unlisted the home page, but allowed a 2nd level page to remain. Finally, we discovered that we owed $1.51 to Google Adwords for a few months. Our credit card number had change and we failed to update Adwords since we were not really using the service anymore. So, we recently updated our credit info, and Google Adwords is fully paid up. I am wondering if anything good will happen to our homepage in Google search results.

There is no doubt that this is the case.I have just investigated a client who was receiving very good organic traffic due to search engine optimisation undertaken by us. He had page one rankings for all keywords. His traffic dropped to literrally nothing. We have since discovered he has an overdue Adwords bill of several months. He refused to pay this as felt he was being ripped off and did not believe was recieving genuine clicks. There is no other explanation for the dramatic change in traffic. The account has now been paid and we are waiting to see the effects of this.
Don't upset big brother - he's in the business of making money end of story!

My business website always appeared on the first or second page of Google. We signed on with Netbiz to try it for for 3 months, we paid in full. After 3 months went by we decided to cancel, our index page now is consistantly on the 3rd page. We did not change our site in any way. They will penalize you if you don't continue.