FTC cracks down on bogus virus alerts
So-called ‘scareware’ firms that falsely claim a user’s computer has a virus to trick them into buying security software are under threat. The Federal Trade Commission has won court backing to freeze the assets of several offenders and bar them from future scams.
The judgment by the US district court in Maryland affects five individuals and two companies, ByteHosting Internet Services and Innovative Marketing. Both lived up to the latter’s name by setting themselves up as an online advertising agency which placed ads for legitimate companies on reputable Web sites.
The scam was that they edited the code behind the adverts to produce pop-up windows, which supposedly scanned a user’s machine and, in every case, reported finding spyware. They then offered the user security products costing upwards of $39.95 under names such as WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus; none of these actually did anything to remove genuine viruses.
Another variation on the same scam involved supposedly finding “illegal pornography” and selling software to remove it from the computer.
The individuals are all now temporarily barred from claiming to have found a security issue on any computer and attempting to conceal their identities. The FTC wants a permanent ban on any of the five marketing security software in this way, though there’s some question about whether that’s necessary or if ‘scareware’ tactics are inherently illegal because they are misleading.
The court has also frozen the assets of the two businesses and ordered firms hosting the domains and websites involved to block them from public access.
Two of the men involved have previously been sued by legitimate security firm Symantec for selling counterfeit software; one settled out of court while the other was hit with a $3.1 million judgment.
The full FTC complaint claims more than one million consumers have been tricked into buying the bogus software by the firms, which would mean a haul of at least $40 million.
Perhaps inevitably, the offenders couldn’t even trust each other. Innovative Marketing is suing one of the five ringleaders and his father for allegedly embezzling millions of dollars from the firm.
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