Over at the Google Groups Google Co-op forum, a Google Co-op engineer was replying to someone worried about using their Google Custom Search Engine on a site without his approval. Why was he worried? Because if that site has bad people who click on ads in a bad way, it is his AdSense account that is at risk for being banned.
It is interesting to see how the Google Co-op Engineer replied:
But regarding adsense abuse, our fraud team is pretty thorough. We wouldn't automatically assign culpability to the account holder, as we know where clicks are coming from.
I have read time and time again, that people have been banned because (they feel) that someone stole their AdSense ID, and put it on a bad site. Heck, I can run hundreds of sites, apply my AdSense ID to one of the sites. Does Google really know which site I own versus which site I don't own? How does Google know in this case if a 3rd party site is really yours or not?
That is why you see Google sometimes ban a site and sometimes not.
So is the next step of AdSense abuse related to the Google Custom Search Engine? Some are worried about it.
But as the Google rep said, "people are not allowed to transplant the code to their site without your permission; if someone has used it without your consent please let us know."
So if some does snag your code, and you know about it, report it asap to Google.
Forum discussion at Google Groups.