When a site engages in malicious behavior of any sort, such as phishing, Google is usually able to catch them in the act. When they do, they will warn users in Chrome and their search results about the site thanks to a service called "Safe Browsing". Google's Safe Browsing service continues to warn users away from a site, which normally consists of a pre-site screen where the user is told that the site is dangerous and must confirm that they want to proceed, until the service is able to verify that the issue has been solved. On the surface, this sounds as thought it would work pretty well, and for the most part, it does. There are a few sites that Google noticed, however, will get cleared and subsequently revert to their old ways. Google has announced that they will be doing something about these sites.
The number of known repeat offenders at the moment is on the low side, but the phenomenon is certainly enough of a problem to warrant Google doing something about it. Their strategy is to no longer check sites off the list, so to speak, but to continue monitoring sites that serve any kind of malicious content, especially after a site seems to have changed their ways and passed an inspection. When such a site reverts to their old ways, Google will label them a repeat offender, and the webmaster will be unable to ask for another review for at least 30 days. While that may not seem like much of a punishment, sites that tend to rely on malicious content for revenue and see reduced user count thanks to Google's warnings typically don't have enough cash on hand for a 30 day traffic reduction to be considered a slap on the wrist.
Google's policy is to label a site hazardous if any of the content, ads or otherwise, engages in phishing, social engineering, pushing malware, or pushing unwanted software. It is important to note that the new repeat offender branding will not apply to sites that are hacked; this means that a site that has malicious content, changes their ways, then gets hacked and includes malicious content again won't get the label. For now, Google has not stated how easy it is to remove the branding. Safe Browsing is not only present in a number of Google products, but they've opened the API to developers, meaning that being labelled a repeat offender could result in traffic reduction through just about all channels.