THE Prime Minister has defended controversial claims by a minister about web giant Google made a day after a police investigation into the company was announced.

Federal police are currently investigating Google over data it collected from unsecured Wi-Fi networks while taking photos for its Street View service.

Communications Minister Stephen Conroy this week said Google could have captured sensitive information including banking transactions.

"They could have hoovered it up, sucked it up into their machine," he said on ABC TV on Monday.

The allegation has been rejected by both Google and the Australian Bankers Association (ABA).

"We've seen and heard no evidence of a compromise of the nature being suggested," ABA policy director Tony Burke told the Financial Review.

Kevin Rudd yesterday said he stood by Senator Conroy, after being asked whether his comments prejudiced the investigation.

"The minister's statements speak for themselves," he said.

"I'm sure they'll be a continued robust exchange between himself and the various companies concerned, I'm sure they'll both argue their positions, I stand by what the minister has said."

The police investigation into Google was announced on Sunday.

Google has admitted it should not have been taking samples of data sent over unsecured Wi-Fi networks, calling the move a "mistake".

However it denied capturing banking information.

"The way it works is that the equipment we use (which we bought from a third party) and our software will recognise encrypted transmissions, but immediately discards that encrypted data," a Google spokesperson told The Australian.