FTC kills scareware operation that duped over a million users
By Layer 8
The Federal Trade Commission today got a court to at least temporarily halt a massive "scareware" scheme, which falsely claimed that scans had detected viruses, spyware, and pornography on consumers' computers.
According to the FTC, the scheme has tricked more than one million consumers into buying computer security products such as WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus. The court also froze the assets of Innovative Marketing, Inc. and ByteHosting Internet Services, LLC to preserve the possibility of providing consumers with monetary redress, the FTC stated.
The defendants used an elaborate ruse that duped Internet advertising networks and popular Web sites into carrying their advertisements, according to the FTC's complaint. The defendants falsely claimed that they were placing Internet ads on behalf of legitimate companies and organizations. But due to hidden programming code that the defendants inserted into the advertisements, consumers who visited Web sites where these ads were placed did not receive them, the FTC said. Instead, consumers received exploitive advertisements that took them to one of the defendants' Web sites. These sites would then claim to scan the consumers' computers for security and privacy issues. The "scans" would find a host of purported problems with the consumers' computers and urge them to buy the defendants' computer security products for $39.95 or more. However, the scans were entirely false, the FTC said
Innovative Marketing is incorporated in Belize and maintains offices in Kiev, Ukraine. ByteHosting Internet Services is based in Cincinnati, Ohio. The FTC complaint alleges that these two companies, along with individuals Daniel Sundin, Sam Jain, Marc D'Souza, Kristy Ross, and James Reno, violated the FTC Act. The complaint also names a sixth individual, Maurice D'Souza, as a relief defendant who received proceeds from the scheme.
Under US District Court for the District of Maryland order, the defendants are barred from falsely representing that they have run any type of computer analysis, or that they have detected security or privacy problems on a consumer's computer. They also are barred from using domain names obtained with false or incomplete information, placing advertisements purportedly on behalf of a third party without that party's consent, or otherwise attempting to conceal their own identities. The order also mandates that companies hosting the defendants' Web sites and providing domain-registration services take the necessary steps to keep consumers from accessing these Web sites, the FTC said.
The FTC seeks to permanently bar the defendants from engaging in "scareware" marketing and pay for any damages and ill-gotten booty.